|value-added (VA) activity|
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Definition of value-added (VA) activity
value-added (VA) activity
an activity that increases the worth of the product or service to the customer
an activity that is necessary for the operation of the business but for which a customer would not want to pay
an activity that increases the time spent on a product or service but that does not increase its worth or value to the customer
The ability to produce a good or service with fewer resources than competitors. See also comparative advantage.
The sum of all the interest options in your policy, including interest.
Money owed by customers.
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
Amounts owed to the company, generally for sales that it has made.
Short-term, non-interest-bearing debts owed to a
A current asset on the balance sheet, representing short-term
Amounts due from customers for sales on open account, not evidenced
Money owed to a business for merchandise or services sold on open account.
The number of days it would take to collect the ending
The ratio of net credit sales to average accounts receivable, a measure of how
A ratio computed by dividing annual
An amount of money invested plus the interest earned on that money.
a repetitive action performed in fulfillment of business functions
the process of detailing the various repetitive actions that are performed in making a product or
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
activity-based budgeting (ABB)
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
activity based costing (ABC)
A relatively new method advocated for the
activity-based costing (ABC)
a process using multiple cost drivers to predict and allocate costs to products and services;
Activity-based costing (ABC)
A cost allocation system that compiles costs and assigns
activity-based management (ABM)
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
a segment of the production or service
a measure of the demands on activities and,
Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity
A payment made by a customer to the company, or by the company to a
A promise to sell an asset before the seller has lined up purchase of the asset. This
Advance material request
Very early orders for materials before the completion
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Automated storage/retrieval system
A racking system using automated systems
Checks deposited by a company that have not yet been cleared.
Checks already deposited that have not yet been cleared.
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
A devaluation that is designed to cheapen a nation's currency and thereby
The amount of cash payable on a benefit.
The method used for computing the bond-equivalent yield.
Bond equivalent yield
Bond yield calculated on an annual percentage rate method. Differs from annual
The annualized yield to maturity computed by doubling the semiannual yield.
Bond Equivalent Yield
Bond yield calculated on an annual percentage rate method
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
An asset’s cost basis minus accumulated depreciation.
The value of an asset as carried on the balance sheet of a
An asset’s original cost, less any depreciation that has been subsequently incurred.
Net worth of the firm’s assets or liabilities according
book value and book value per share
Generally speaking, these terms
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals:
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Book Value per Share
The book value of a company divided by the number of shares
the difference between total actual overhead
CAPITAL IN EXCESS OF PAR VALUE
What a company collected when it sold stock for more than the par value per share.
CASH AND CASH EQUIVALENTS
The balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid.
Cash and equivalents
The value of assets that can be converted into cash immediately, as reported by a
A short-term security that is sufficiently liquid that it may be considered the financial
Temporary investments of currently excess cash in short-term, high-quality
Highly liquid, fixed-income investments with original maturities of three months or less.
Instruments or investments of such high liquidity and safety that they are virtually equal to cash.
An amount the insurance company will pay if the policyholder ends a whole life
Cash Surrender Value
This 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 Value
Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.
Cash value added (CVA)
A method of investment appraisal that calculates the ratio of the net present value of an
An amount that would be accepted in lieu of a chance at a possible higher, but
coefficient of variation
a measure of risk used when the standard deviations for multiple projects are approximately
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
A country has a comparative advantage over another country in the production of good A if to produce a unit of A it forgoes more of the production of good B than would the other country when it produces a unit of good A. Its efficiency in the production of good A relative to its efficiency in the production of good B is greater than is the case for the other country. See also absolute advantage.
The strategies, skills, knowledge, resources or competencies that differentiate a business from its competitors.
Continuous random variable
A random value that can take any fractional value within specified ranges, as
the budget variance of the two variance approach to analyzing overhead variances
Also called parity value, the value of a convertible security if it is converted immediately.
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A statistical measure of the degree to which random variables move together.
A measure of the degree to which returns on two assets move in
Days in receivables
Average collection period.
an unknown item for which a linear programming
an unknown variable that is to be predicted
A financial instrument that is based on some underlying asset.
Contracts such as options and futures whose price is derived from the price of the
Markets for derivative instruments.
A financial security, such as an option, or future, whose value is derived in part from the
Fall in the government-determined fixed exchange rate.
Devaluation A decrease in the spot price of the currency
Direct materials mix variance
The variance between the budgeted and actual mixes of
Discounting of Accounts Receivable
Short-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable.
Discrete random variable
A random variable that can take only a certain specified set of discrete possible
Economic Value Added (EVA)
Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge
economic value added (EVA)
a measure of the extent to which income exceeds the dollar cost of capital; calculated
economic value added (EVA)
Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost
A value determined within the context of a model.
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
Equivalent annual benefit
The equivalent annual annuity for the net present value of an investment project.
Equivalent annual cash flow
Annuity with the same net present value as the company's proposed investment.
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