Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: financial, stock trading, financial advisor, finance, credit, accounting, inventory control, business,
Definition of Underground Economy
Economic activity not observed by tax collectors and government statisticians.
an economy characterized by the international
An economy in which imports and exports are very small relative to GDP and so are ignored in macroeconomic analysis. Contrast with open economy.
An economy which engages in a significant amount of trade. Contrast with closed economy.
An investment company that sells shares like any other corporation and usually does not
Mortgage against which no additional debt may be issued.
Bonds that are designed so as to qualify for immediate trading in any domestic capital market
A mutual fund that can invest anywhere in the world, including the U.S.
Tendency toward a worldwide investment environment, and the integration of national capital
a changeover in market focus from competition
Abrams’ model for calculating DLOM based on the interaction of discounts from four Economic components.
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full
Schedule of depreciation rates allowed for tax purposes.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
After-tax profit margin
The ratio of net income to net sales.
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
information that is known to some people but not to other people.
A situation wherein participants in a transaction have different net tax rates.
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Average tax rate
taxes as a fraction of income; total taxes divided by total taxable income.
Balance of trade
Net flow of goods (exports minus imports) between countries.
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
Related: Program trades.
Before-tax profit margin
The ratio of net income before taxes to net sales.
A large trading order, defined on the New York Stock Exchange as an order that consists of
An analysis of the level of sales at which a project would make zero profit.
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
Money invested in a firm.
Net result of public and private international investment and lending activities.
decision Allocation of invested funds between risk-free assets versus the risky portfolio.
Capital asset pricing model (CAPM)
An Economic theory that describes the relationship between risk and
A firm's set of planned capital expenditures.
The process of choosing the firm's long-term capital assets.
Amount used during a particular period to acquire or improve long-term assets such as
The transfer of capital abroad in response to fears of political risk.
When a stock is sold for a profit, it's the difference between the net sales price of securities and
Capital gains yield
The price change portion of a stock's return.
A lease obligation that has to be capitalized on the balance sheet.
The difference between the net cost of a security and the net sale price, if that security is sold at a loss.
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
Placing one or more limits on the amount of new investment undertaken by a firm, either
The makeup of the liabilities and stockholders' equity side of the balance sheet, especially
Amounts of directly contributed equity capital in excess of the par value.
The debt and/or equity mix that fund a firm's assets.
A method of constructing a replicating portfolio in which the manager purchases a
Also called financial leverage ratios, these ratios compare debt to total capitalization
A table showing the capitalization of a firm, which typically includes the amount of
Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures
Interest that is not immediately expensed, but rather is considered as an asset and is then
The provision of some futures contracts that requires not delivery of underlying assets but
Cash flow after interest and taxes
Net income plus depreciation.
A statistical technique that identifies clusters of stocks whose returns are highly correlated
The representing of accounting information over multiple years as percentages
Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired
The collection of money managers of similar investment style used for assessing
Complete capital market
A market in which there is a distinct marketable security for each and every
movement of cash from different lockbox locations into a single concentration
A type of bond that has an infinite life but is not issued in the U.S. capital markets.
The combining of two or more firms to form an entirely new entity.
A merchant banking subsidiary set up by several banks that may or may not be of the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
Cost of capital
The required return for a capital budgeting project.
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
The exchange of goods for other goods rather than for cash; barter.
The process of analyzing information on companies and bond issues in order to estimate the
The return at which two alternative projects have the same net present value.
Total par value (number of shares issued, multiplied by the par value of each share). Also
The use of general fact to provide accurate information about a specific situation.
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The tender and receipt of an actual commodity or financial instrument in settlement of a futures contract.
The written notice given by the seller of his intention to make delivery against an open, short
The options available to the seller of an interest rate futures contract, including the quality
Those points designated by futures exchanges at which the financial instrument or
The price fixed by the Clearing house at which deliveries on futures are in invoiced; also the
Delivery versus payment
A transaction in which the buyer's payment for securities is due at the time of
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
A statistical process that links the probability of default to a specified set of financial ratios.
Doctrine of sovereign immunity
Doctrine that says a nation may not be tried in the courts of another country
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
Agreement between two countries that taxes paid abroad can be offset against
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Economic environment in which the firm expects to reside over the life of the
See: in-substance defeasance.
Exists when the costs and/or revenues of one project depend on those of another.
The real flow of cash that a firm could pay out forever in the absence of any change in
The extent to which the value of the firm will change because of an exchange rate change.
Cash flow plus change in present value.
Economic order quantity (EOQ)
The order quantity that minimizes total inventory costs.
Profits in excess of the competitive level.
In project financing, the risk that the project's output will not be salable at a price that will
For any entity, the difference between the market value of all its assets and the market
An agreement between two or more countries that allows the free movement of capital,
Efficient capital market
A market in which new information is very quickly reflected accurately in share
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Expected future cash flows
Projected future cash flows associated with an asset of decision.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
1) A bond in default trades flat; that is, the price quoted covers both principal and unpaid,
Flat price (also clean price)
The quoted newspaper price of a bond that does not include accrued interest.
A member who generally trades only for his own account, for an account controlled by him or
Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.