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value-added (VA) activity |
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Definition of value-added (VA) activityvalue-added (VA) activityan activity that increases the worth of the product or service to the customer
Related Terms:business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay non-value-added (NVA) activityan activity that increases the time spent on a product or service but that does not increase its worth or value to the customer NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. PV (present value of cash flows)the value in today’s dollars of cash flows that occur in different time periods. Accounts receivableMoney owed by customers. Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Advance commitmentA promise to sell an asset before the seller has lined up purchase of the asset. This Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Availability floatChecks deposited by a company that have not yet been cleared. Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Beggar-thy-neighbor devaluationA devaluation that is designed to cheapen a nation's currency and thereby Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Carrying valueBook value. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a 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-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Certainty equivalentAn amount that would be accepted in lieu of a chance at a possible higher, but Common stock equivalentA convertible security that is traded like an equity issue because the optioned Continuous random variableA random value that can take any fractional value within specified ranges, as Conversion valueAlso called parity value, the value of a convertible security if it is converted immediately. Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. CovarianceA statistical measure of the degree to which random variables move together. Days in receivablesAverage collection period. Derivative instrumentsContracts such as options and futures whose price is derived from the price of the Derivative marketsMarkets for derivative instruments. Derivative securityA financial security, such as an option, or future, whose value is derived in part from the Devaluation A decrease in the spot price of the currency
Discrete random variableA random variable that can take only a certain specified set of discrete possible Endogenous variableA value determined within the context of a model. Equivalent annual annuityThe equivalent amount per year for some number of years that has a present Equivalent annual benefitThe equivalent annual annuity for the net present value of an investment project. Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Equivalent annual costThe equivalent cost per year of owning an asset over its entire life. Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be Equivalent loanGiven the after-tax stream associated with a lease, the maximum amount of conventional Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax Evaluation periodThe time interval over which a money manager's performance is evaluated. Exercise valueThe amount of advantage over a current market transaction provided by an in-the-money Exogenous variableA variable whose value is determined outside the model in which it is used. Also called Expected valueThe weighted average of a probability distribution. Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Extraordinary positive valueA positive net present value. Face valueSee: Par value. Firm's net value of debtTotal firm value minus total firm debt. Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Future valueThe amount of cash at a specified date in the future that is equivalent in value to a specified Going-private transactionsPublicly owned stock in a firm is replaced with complete equity ownership by a Information-motivated tradesTrades in which an investor believes he or she possesses pertinent Intrinsic value of an optionThe amount by which an option is in-the-money. An option which is not in-themoney Intrinsic value of a firmThe present value of a firm's expected future net cash flows discounted by the Investment valueRelated:straight value. Irrelevance resultThe Modigliani and Miller theorem that a firm's capital structure is irrelevant to the firm's Linter's observationsJohn Lintner's work (1956) suggested that dividend policy is related to a target level of Liquidation valueNet amount that could be realized by selling the assets of a firm after paying the debt. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Market value1) The price at which a security is trading and could presumably be purchased or sold. Market value ratiosRatios that relate the market price of the firm's common stock to selected financial Market value-weighted indexAn index of a group of securities computed by calculating a weighted average Maturity valueRelated: par value. Mean-variance analysisEvaluation of risky prospects based on the expected value and variance of possible outcomes. Mean-variance criterionThe selection of portfolios based on the means and variances of their returns. The Mean-variance efficient portfolioRelated: Markowitz efficient portfolio Minimum-variance frontierGraph of the lowest possible portfolio variance that is attainable for a given Minimum-variance portfolioThe portfolio of risky assets with lowest variance. Net adjusted present valueThe adjusted present value minus the initial cost of an investment. Net advantage of refundingThe net present value of the savings from a refunding. Net advantage to leasingThe net present value of entering into a lease financing arrangement rather than Net advantage to mergingThe difference in total post- and pre-merger market value minus the cost of the merger. Net asset value (NAV)The value of a fund's investments. For a mutual fund, the net asset value per share Net book valueThe current book value of an asset or liability; that is, its original book value net of any Net present value (NPV)The present value of the expected future cash flows minus the cost. Net present value of growth opportunitiesA model valuing a firm in which net present value of new Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Net salvage valueThe after-tax net cash flow for terminating the project. Normal random variableA random variable that has a normal probability distribution. NovationDefeasance whereby the firm's debt is canceled. Original face valueThe principal amount of the mortgage as of its issue date. Par valueAlso called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date. Parity valueRelated:conversion value Performance evaluationThe evaluation of a manager's performance which involves, first, determining Plain vanillaA term that refers to a relatively simple derivative financial instrument, usually a swap or other Portfolio varianceWeighted sum of the covariance and variances of the assets in a portfolio. Present valueThe amount of cash today that is equivalent in value to a payment, or to a stream of payments, Present value factorFactor used to calculate an estimate of the present value of an amount to be received in Present value of growth opportunities (NPV)Net present value of investments the firm is expected to make Price value of a basis point (PVBP)Also called the dollar value of a basis point, a measure of the change in Private Export Funding Corporation (PEFCO)Company that mobilizes private capital for financing the Private-label pass-throughsRelated: Conventional pass-throughs. Private placementThe sale of a bond or other security directly to a limited number of investors.
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