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Financial Terms | |
Transparency |
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Definition of TransparencyTransparencyThe full and fair disclosure of all material items that have implications for the
Related Terms:Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange Accounting earningsearnings of a firm as reported on its income statement. acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable activity analysisthe process of detailing the various repetitive actions that are performed in making a product or Adjusted EarningsNet income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss. Advance material requestVery early orders for materials before the completion ![]() All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the All-in costTotal costs, explicit and implicit. All or noneRequirement that none of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable allocateassign based on the use of a cost driver, a cost predictor, allocationthe systematic assignment of an amount to a recipient AllocationThe process of storing costs in one account and shifting them to other Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for bad debtsAn offset to the accounts receivable balance, against which ![]() Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Balloon maturityAny large principal payment due at maturity for a bond or loan with or without a a sinking BARRA's performance analysis (PERFAN)A method developed by BARRA, a consulting firm in basic earnings per share (EPS)This important ratio equals the net Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Bill of materialsA listing of all the materials and quantities that go to make up a completed product. bill of materialsa document that contains information about ![]() Bill of materialsAn itemization of the parts and subassemblies required to create a Bill of materials (BOM)A listing of all parts and subassemblies required to produce one Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be Break-even analysisAn analysis of the level of sales at which a project would make zero profit. break-even analysisanalysis of the level of sales at which the company breaks even. Break-Even AnalysisAn analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero). Breeder bill of materialsA bill of material that accounts for the generation and CallAn option that gives the right to buy the underlying futures contract. Call a. An option to buy a certain quantity of a stock or commodity for a Call an optionTo exercise a call option. Call dateA date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Call protectionA feature of some callable bonds that establishes an initial period when the bonds may not be Call provisionAn embedded option granting a bond issuer the right to buy back all or part of the issue prior Call riskThe combination of cash flow uncertainty and reinvestment risk introduced by a call provision. Call swaptionA swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The CallableA financial security such as a bond with a call option attached to it, i.e., the issuer has the right to Callable bondA bond that allows the issuer to buy back the bond at a callable bondBond that may be repurchased by the issuer before maturity at specified call price. Capital allocationdecision allocation of invested funds between risk-free assets versus the risky portfolio. Capital Consumption AllowanceSee depreciation. Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. capital investment analysisRefers to various techniques and procedures Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Changes in Financial PositionSources of funds internally provided from operations that alter a company's chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. Chinese wallCommunication barrier between financiers (investment bankers) and traders. This barrier is Clear a positionTo eliminate a long or short position, leaving no ownership or obligation. Cluster analysisA statistical technique that identifies clusters of stocks whose returns are highly correlated Common-base-year analysisThe representing of accounting information over multiple years as percentages Comparative credit analysisA method of analysis in which a firm is compared to others that have a desired CompositionVoluntary arrangement to restructure a firm's debt, under which payment is reduced. Core EarningsA measure of earnings that includes only the results of the primary operating Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both correlation analysisan analytical technique that uses statistical cost allocationthe assignment, using some reasonable basis, Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course cost driver analysisthe process of investigating, quantifying, Cost Plus Estimated Earnings in Excess of BillingsRevenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Counterpart itemsIn the balance of payments, counterpart items are analogous to unrequited transfers in the Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Covered callA short call option position in which the writer owns the number of shares of the underlying Covered call writing strategyA strategy that involves writing a call option on securities that the investor Credit analysisThe process of analyzing information on companies and bond issues in order to estimate the credit analysisProcedure to determine the likelihood a customer will pay its bills. Deemed DispositionUnder certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. This could happen upon death or transfer of ownership. Deferred callA provision that prohibits the company from calling the bond before a certain date. During this Depreciation AllowancesTax deductions that businesses can claim when they spend money on investment goods. Differential disclosureThe practice of reporting conflicting or markedly different information in official diluted earnings per share (EPS)This measure of earnings per share direct materiala readily identifiable part of a product; the cost of such a part Direct materials costThe cost of all materials used in a cost object, such as finished goods. Direct materials mix varianceThe variance between the budgeted and actual mixes of DisclosureAdditional information attached to a company’s financial statements, usually Discriminant analysisA statistical process that links the probability of default to a specified set of financial ratios. Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Dynamic asset allocationAn asset allocation strategy in which the asset mix is mechanistically shifted in Earmarked materialInventory that has been physically marked as being for a EarningsNet income for the company during the period. EarningsIn general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax. earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold Earnings before interest and taxes (EBIT)The operating profit before deducting interest and tax. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |