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Financial Terms | |
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 Absolute AdvantageThe ability to produce a good or service with fewer resources than competitors. See also comparative advantage. Account ValueThe sum of all the interest options in your policy, including interest. Accounts receivableMoney owed by customers. ACCOUNTS RECEIVABLEAmounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts. Accounts receivableAmounts owed to the company, generally for sales that it has made. ![]() accounts receivableShort-term, non-interest-bearing debts owed to a Accounts receivableA current asset on the balance sheet, representing short-term Accounts ReceivableAmounts due from customers for sales on open account, not evidenced Accounts ReceivableMoney owed to a business for merchandise or services sold on open account. Accounts Receivable Days (A/R Days)The number of days it would take to collect the ending Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual Accumulated ValueAn amount of money invested plus the interest earned on that money. activitya repetitive action performed in fulfillment of business functions activity analysisthe process of detailing the various repetitive actions that are performed in making a product or Activity-based budgetingA 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 Activity-based costingA 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 activity centera segment of the production or service activity drivera measure of the demands on activities and, Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity AdvanceA payment made by a customer to the company, or by the company to a Advance commitmentA promise to sell an asset before the seller has lined up purchase of the asset. This Advance material requestVery early orders for materials before the completion Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Automated storage/retrieval systemA racking system using automated systems Availability floatChecks deposited by a company that have not yet been cleared. availability floatChecks already deposited that have not yet been cleared. Available-for-Sale SecurityA 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 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 Benefit ValueThe amount of cash payable on a benefit. Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent YieldBond yield calculated on an annual percentage rate method Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A BOOK VALUEAn asset’s cost basis minus accumulated depreciation. Book ValueThe value of an asset as carried on the balance sheet of a Book valueAn asset’s original cost, less any depreciation that has been subsequently incurred. book valueNet worth of the firm’s assets or liabilities according book value and book value per shareGenerally speaking, these terms BOOK VALUE OF COMMON STOCKThe 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 shareThe ratio of stockholder equity to the average number of common shares. Book value Book Value per ShareThe book value of a company divided by the number of shares budget variancethe difference between total actual overhead CAPITAL IN EXCESS OF PAR VALUEWhat a company collected when it sold stock for more than the par value per share. Carrying valueBook value. 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 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-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 value added (CVA)A method of investment appraisal that calculates the ratio of the net present value of an Certainty equivalentAn amount that would be accepted in lieu of a chance at a possible higher, but coefficient of variationa measure of risk used when the standard deviations for multiple projects are approximately Common stock equivalentA convertible security that is traded like an equity issue because the optioned Comparative AdvantageA 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. Competitive AdvantageThe strategies, skills, knowledge, resources or competencies that differentiate a business from its competitors. Continuous random variableA random value that can take any fractional value within specified ranges, as controllable variancethe budget variance of the two variance approach to analyzing overhead variances 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. CovarianceA measure of the degree to which returns on two assets move in Days in receivablesAverage collection period. decision variablean unknown item for which a linear programming dependent variablean unknown variable that is to be predicted DerivativeA financial instrument that is based on some underlying asset. 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 DevaluationFall in the government-determined fixed exchange rate. Devaluation A decrease in the spot price of the currency
Direct materials mix varianceThe variance between the budgeted and actual mixes of Discounting of Accounts ReceivableShort-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 variableA 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 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. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |