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Definition of W-9 Form
A form issued to a company’s suppliers, requesting that they identify
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
Information that is known to some people but not to other people.
A situation wherein participants in a transaction have different net tax rates.
taxes as a fraction of income; total taxes divided by total taxable income.
Total taxes owed divided by total income.
A method developed by BARRA, a consulting firm in
The ratio of net income before taxes to net sales.
Large and creditworthy company.
The tax rate at which a party to a prospective transaction is indifferent between entering
Net income plus depreciation.
The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
Related: Unsystematic risk
See asset-specific risk
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 company arrangement
Arrangement whereby the shareholders of a project receive output free of
Current Income Tax Expense
That portion of the total income tax provision that is based on
Current Tax Payment Act of 1943
A federal Act requiring employers to withhold income taxes from employee pay.
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
depreciation tax shield
Reduction in taxes attributable to the depreciation allowance.
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Agreement between two countries that taxes paid abroad can be offset against
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.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
Effective Tax Rate
The total tax provision divided by pretax book income from continuing
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Federal Employer Identification Number
A unique identification number issued
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
company engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public.
Financial Numbers Game
The use of creative accounting practices to alter a financial statement
Flat benefit formula
Method used to determine a participant's benefits in a defined benefit plan by
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
A form used by businesses to report to the government payments
A form used by employees to report to an employer the amount of
The standard form used for notifying a company to garnish an employee’s
The form used by employers to report tip income by their employees
A form used to report federal unemployment tax remittances and liabilities.
A shortened version of the form 940.
The Employment Eligibility Verification form, which must be filled
Formalized Line of Credit
A contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year.
A method of selling a new issue of common stock in which the SEC declares the registration
Future-Oriented Financial Information
Information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection.
A corporation that owns enough voting stock in another firm to control management and
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA)
A federal Act shielding employers from liability if they have made
Immigration Reform and Control Act of 1986
A federal Act requiring all employers having at least four employees to verify the identity and employment
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
What the business paid to the IRS.
A government tax on the income earned by an individual or corporation.
Income Tax Expense
See income tax provision.
Income Tax Provision
The expense deduction from pretax book income reported on the
A format for the operating section of the cash-flow statement that
taxes paid by consumers when they buy goods and services. A sales tax is an example.
The loss in purchasing power due to inflation eroding the real value of financial assets such as cash.
bits of knowledge or fact that have been carefully
A situation involving information that is known to some, but not all, participants.
Information Coefficient (IC)
The correlation between predicted and actual stock returns, sometimes used to
The rise in the stock price following the dividend signal.
information content of dividends
Dividend increases send good news about cash flow and earnings. Dividend cuts send bad news.
Transaction costs that include the assessment of the investment merits of a financial asset.
Trades in which an investor believes he or she possesses pertinent
organizations that furnish investment and other types of information, such as
The speed and accuracy with which prices reflect new information.
Trades that are the result of either a reallocation of wealth or an implementation of an
Relevant information about a company that has not yet been made public. It is illegal for
A firm licensed to sell insurance to the public.
Loan made by one unit of a corporation to another unit of the same corporation.
Transaction carried out between two units of the same corporation.
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
interest tax shield
tax savings resulting from deductibility of interest payments.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
Issued share capital
Total amount of shares that are in issue. Related: outstanding shares.
The number of shares that the company has sold to the public.
Shares that have been issued by the company.
A number uniquely identifying a product or component.
Law of large numbers
The mean of a random sample approaches the mean (expected value) of the
A legal proceeding for liquidating or reorganizing a business.
Value at which a company's shares are recorded in its books.
The deposit of cash and permitted securities, as specified in the bond indenture, into an
Investments that a regulated entity is permitted to make under the rules and regulations
Legal Reserve Requirement
See reserve requirement.
limited liability company
an organizational form that is a hybrid of the corporate and partnership organizational
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
management information system (MIS)
a structure of interrelated elements that collects, organizes, and communicates
Margin Tax Rate
The tax rate applicable to the last unit of income.
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