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Financial Terms | |
Target cash balance |
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Definition of Target cash balanceTarget cash balanceOptimal amount of cash for a firm to hold, considering the trade-off between the
Related Terms:Adjusted Cash Flow Provided by Continuing Operationscash flow provided by operating Balance of Merchandise TradeThe difference between exports and imports of goods. 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. Balance of tradeNet flow of goods (exports minus imports) between countries. Balance of TradeSee balance of merchandise trade. ![]() Balance sheetAlso called the statement of financial condition, it is a summary of the assets, liabilities, and BALANCE SHEETA “snapshot” statement that freezes a company on a particular day, like the last day of the year, and shows the balances in its asset, liability, and stockholders’ equity accounts. It’s governed by the formula: Balance SheetA financial statement showing the financial position of a business – its assets, liabilities and Balance SheetOne of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The balance Sheet is prepared using the balances at the end of a specific day. balance sheetA term often used instead of the more formal and correct Balance sheetA report that summarizes all assets, liabilities, and equity for a company balance sheetFinancial statement that shows the value of the Balance SheetA financial report showing the status of a company's assets, liabilities, and owners' equity on a given date. Balance sheet exposureSee:accounting exposure. ![]() Balance sheet identityTotal Assets = Total Liabilities + Total Stockholders' Equity Balanced-Budget MultiplierThe multiplier associated with a change in government spending financed by an equal change in taxes. Balanced fundAn investment company that invests in stocks and bonds. The same as a balanced mutual fund. Balanced mutual fundThis is a fund that buys common stock, preferred stock and bonds. The same as a Balanced ScorecardA system of non-financial performance measurement that links innovation, customer and process measures to financial performance. balanced scorecard (BSC)an approach to performance Basic balanceIn a balance of payments, the basic balance is the net balance of the combination of the current CashThe value of assets that can be converted into cash immediately, as reported by a company. Usually CashAmounts held in currency and coin (commonly referred to as petty cash) and amounts on deposit in financial institutions. CashCurrency, coin, and funds on deposit that are available for immediate withdrawal without Cash accountingA method of accounting in which profit is calculated as the difference between income Cash and carryPurchase of a security and simultaneous sale of a future, with the balance being financed CASH AND CASH EQUIVALENTSThe balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its cash burn rateA relatively recent term that refers to how fast a business Cash commodityThe actual physical commodity, as distinguished from a futures contract. Cash conversion cycleThe length of time between a firm's purchase of inventory and the receipt of cash cash conversion cyclePeriod between firm’s payment for materials Cash costThe amount of cash expended. Cash cowA company that pays out all earnings per share to stockholders as dividends. Or, a company or cash cowBusiness that produces a lot of cash but few growth prospects. Cash cycleIn general, the time between cash disbursement and cash collection. In net working capital Cash CycleThe length of time between a purchase of materials and collection of accounts receivable generated by the sale of the products made from the materials. Cash deficiency agreementAn agreement to invest cash in a project to the extent required to cover any cash Cash deliveryThe provision of some futures contracts that requires not delivery of underlying assets but Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash EquivalentsHighly liquid, fixed-income investments with original maturities of three months or less. Cash EquivalentsInstruments or investments of such high liquidity and safety that they are virtually equal to cash. Cash flowIn investments, it represents earnings before depreciation , amortization and non-cash charges. cash flowAn obvious but at the same time elusive term that refers to cash cash flowthe receipt or disbursement of cash; when related Cash flowcash received and paid over time. Cash FlowIn investments, NET INCOME plus DEPRECIATION and other noncash charges. In this sense, it is synonymous with cash EARNINGS. Investors focus on cash flow from operations because of their concern with a firm's ability to pay dividends. Cash flow after interest and taxesNet income plus depreciation. Cash-flow break-even pointThe point below which the firm will need either to obtain additional financing Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash Flow ForecastAn estimate of the timing and amount of a company's inflows and outflows of money measured over a specific period of time typically monthly for one to two years then annually for an additional one to three years. cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash flow matchingAlso called dedicating a portfolio, this is an alternative to multiperiod immunization in Cash flow per common sharecash flow from operations minus preferred stock dividends, divided by the Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions Cash Flow Provided or Used from Financing Activitiescash receipts and payments involving Cash Flow Provided or Used from Investing Activitiescash receipts and payments involving CASH-FLOW STATEMENTA statement that shows where a company’s cash came from and where it went for a period of time, such as a year. Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. Cash flow time-lineLine depicting the operating activities and cash flows for a firm over a particular period. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations CASH FLOWS FROM FINANCING ACTIVITIESA section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations. CASH FLOWS FROM INVESTING ACTIVITIESA section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery. CASH FLOWS FROM OPERATIONSA section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business. Cash management billVery short maturity bills that the Treasury occasionally sells because its cash Cash marketsAlso called spot markets, these are markets that involve the immediate delivery of a security Cash offerA public equity issue that is sold to all interested investors. Cash ratioThe proportion of a firm's assets held as cash. Cash RatioRatio of cash and cash equivalents to liabilities; in the case of a bank, the ratio of cash to total deposit liabilities. Cash receipts journalA journal used to record the transactions that result in a debit to cash. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Cash Surrender ValueThis is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications. Cash Surrender ValueBenefit that entitles a policy owner to an amount of money upon cancellation of a policy. Cash transactionA transaction where exchange is immediate, as contrasted to a forward contract, which Cash TurnoverThe number of cash cycles completed in one year. Cash value added (CVA)A method of investment appraisal that calculates the ratio of the net present value of an CashoutRefers to a situation where a firm runs out of cash and cannot readily sell marketable securities. common-size balance sheetbalance sheet that presents items as a percentage of total assets. Compensating balanceAn excess balance that is left in a bank to provide indirect compensation for loans Declining balanceAn accelerated depreciation method that calculates depreciation each year by applying a fixed rate to the asset’s book (cost–accumulated depreciation) value. Depreciation stops when the asset’s book value reaches its salvage value. Declining-balanceA method of depreciation. Discounted cash flowA technique that determines the present value of future cash Discounted Cash FlowTechniques for establishing the relative worth of a future investment by discounting (at a required rate of return) the expected net cash flows from the project. Discounted cash flow (DCF)Future cash flows multiplied by discount factors to obtain present values. Discounted cash flow (DCF)A method of investment appraisal that discounts future cash flows to present value using a discount rate, which is the risk-adjusted cost of capital. discounted cash flow (DCF)Refers to a capital investment analysis technique Discretionary cash flowcash flow that is available after the funding of all positive NPV capital investment Double-declining-balance depreciationMethod of accelerated depreciation. Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Expected future cash flowsProjected future cash flows associated with an asset of decision. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |