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Financial Terms | |
Take-or-pay contract |
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Definition of Take-or-pay contractTake-or-pay contractA contract that obligates the purchaser to take any product that is offered to it (and pay
Related Terms:Accounts payableMoney owed to suppliers. ACCOUNTS PAYABLEAmounts a company owes to creditors. Accounts payableAmounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually Accounts payable involves the receipt of an invoice from the company providing the services or goods. accounts payableShort-term, non-interest-bearing liabilities of a business Accounts payableAcurrent liability on the balance sheet, representing short-term obligations Accounts PayableAmounts due to vendors for purchases on open account, that is, not evidenced Accounts Payable Days (A/P Days)The number of days it would take to pay the ending balance ![]() Accrued expenses payableExpenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services. accrued expenses payableThe account that records the short-term, noninterest- Automatic Benefits PaymentAutomatic payment of moneys derived from a benefit. Balance of paymentsA statistical compilation formulated by a sovereign nation of all economic transactions Balance of PaymentsThe difference between the demand for and supply of a country's currency on the foreign exchange market. Balance of Payments AccountsA statement of a country's transactions with other countries. Bonds payableAmounts owed by the company that have been formalized by a legal document called a bond. Break-even lease paymentThe lease payment at which a party to a prospective lease is indifferent between Break-even payment rateThe prepayment rate of a MBS coupon that will produce the same CFY as that of Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Clearing House Automated Payments System (CHAPS)A computerized clearing system for sterling funds Clearing House Interbank Payments System (CHIPS)An international wire transfer system for high-value Completed-Contract MethodA contract accounting method that recognizes contract revenue Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the contingent paycompensation that is dependent on the ContractA term of reference describing a unit of trading for a financial or commodity future. Also, the actual ContractA formal written statement of the rights and obligations of each party to a transaction. Contract AccountingMethod of accounting for sales or service agreements where completion contract manufactureran external party that has been granted an outsourcing contract to produce a part or component for an entity Contract monthThe month in which futures contracts may be satisfied by making or accepting a delivery. contract vendoran external party that has been granted an Contract Work Hours and Safety Standards ActA federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week. cost-plus contracta contract in which the customer agrees Coupon paymentsA bond's interest payments. Current Tax Payment Act of 1943A federal Act requiring employers to withhold income taxes from employee pay. Customary payout ratiosA range of payout ratios that is typical based on an analysis of comparable firms. Date of paymentDate dividend checks are mailed. Delivery versus paymentA transaction in which the buyer's payment for securities is due at the time of Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an Dividend payout ratioPercentage of earnings paid out as dividends. dividend payout ratioComputed by dividing cash dividends for the year dividend payout ratioPercentage of earnings paid out as dividends. Electronic Federal Tax Payment Systems (EFTPS)An electronic funds transfer system used by businesses to remit taxes to the government. Equal Pay Act of 1963A federal Act requiring that both sexes receive equal pay Feasible target payout ratiospayout ratios that are consistent with the availability of excess funds to make FHA prepayment experienceThe percentage of loans in a pool of mortgages outstanding at the origination Fixed-rate payerIn an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a Floating-rate contractA guaranteed investment contract where the credit rating is tied to some variable Floating-rate payerIn an interest rate swap, the counterparty who pays a rate based on a reference rate, Forward contractA cash market transaction in which delivery of the commodity is deferred until after the forward contractAgreement to buy or sell an asset in the future at an agreed price. Forward forward contractIn Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to Full-payout leaseSee: financial lease. Futures contractAgreement to buy or sell a set number of shares of a specific stock in a designated future futures contractExchange-traded promise to buy or sell an asset in the future at a prespecified price. Futures ContractA contract in which the seller agrees to provide something to a buyer at a specified future date at an agreed price. Futures contract multipleA constant, set by an exchange, which when multiplied by the futures price gives Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments Gross PayThe amount of earnings due to an employee prior to tax and other deductions. Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a Hell-or-high-water contractA contract that obligates a purchaser of a project's output to make cash Implicit ContractAn unwritten understanding between two groups, such as an understanding between an employer and employees that employees will receive a stable wage despite business cycle activity. Interac® Direct PaymentInstead of paying with cash or a credit card, Interac Direct payment allows you to pay for your purchase with a debit card, such as your bank card. The amount of the purchase is electronically debited, or withdrawn, from your bank account (see debit card). Interest payableThe amount of interest that is owed but has not been paid at the end of a period. Interest paymentscontractual debt payments based on the coupon rate of interest and the principal amount. Lag response of prepaymentsThere is typically a lag of about three months between the time the weighted Lease PaymentThe consideration paid by the lessee to the lessor in exchange for the use of the leased equipment/property. payments are usually made at fixed intervals. Level payThe characteristic of the scheduled principal and interest payments due under a mortgage such that Loans payableAmounts that have been loaned to the company and that it still owes. McNamara-O'Hara Service Contract Act of 1965A federal Act requiring federal contractors to pay those employees working on a federal contract at merit paya pay increment earned by achieving a specific Most distant futures contractWhen several futures contracts are considered, the contract settling last. Nearby futures contractWhen several futures contracts are considered, the contract with the closest Net PayThe amount of an employee’s wages payable after all tax and other deductions have been removed. Next futures contractThe contract settling immediately after the nearby futures contract. Nexus (of contracts)A set or collection of something. Notes payableAmounts owed by the company that have been formalized by a legal document called a note. online bill paymentThe electronic payment of a bill via the Internet. The specified amount of the bill is electronically debited from your account. Open contractscontracts which have been bought or sold without the transaction having been completed by Optimal contractThe contract that balances the three types of agency costs (contracting, monitoring, and Options contractA contract that, in exchange for the option price, gives the option buyer the right, but not Options contract multipleA constant, set at $100, which when multiplied by the cash index value gives the Pay-upThe loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or Payable through draftsA method of making payment that is used to maintain control over payments made PayablesRelated: Accounts payable. PaybackThe length of time it takes to recover the initial cost of a project, without regard to the time value of money. PaybackA method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay. PaybackThe length of time required for the net revenues of an investment for the net revenues of an investment to return the cost of the investment. Payback methodA capital budgeting analysis method that calculates the amount of Payback PeriodThe number of years necessary for the net cash flows of an payback periodthe time it takes an investor to recoup an payback periodTime until cash flows recover the initial investment of the project. PaycardA credit card into which a company directly deposits an employee's net pay. PaydownIn a Treasury refunding, the amount by which the par value of the securities maturing exceeds that Payment dateThe date on which each shareholder of record will be sent a check for the declared dividend. Payment dateThe date established for the payment of a declared dividend. Payment floatCompany-written checks that have not yet cleared. payment floatChecks written by a company that have not yet cleared. Payment-In-Kind (PIK)bond A bond that gives the issuer an option (during an initial period) either to make Payments nettingReducing fund transfers between affiliates to only a netted amount. Netting can be done on Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |