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Financial Terms | |
W-type bottom |
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Definition of W-type bottomW-type bottomA double bottom where the price or indicator chart has the appearance of a W.
Related Terms:bottom lineA commonly used term that refers to the net income (profit) Bottom-up equity management styleA management style that de-emphasizes the significance of economic net income (also called the bottom line, earnings, net earnings, and netoperating earnings) Sales-type leaseAn arrangement whereby a firm leases its own equipment, such as IBM leasing its own Sales-type LeaseLease accounting used by a manufacturer who is also a lessor. Up-front gross TypeThe classification of an option contract as either a put or a call. 45-Degree LineA line representing equilibrium in the goods and services market, on a diagram with aggregate demand on the vertical axis and aggregate supply on the horizontal axis. ![]() Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange 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 Aggregate SupplyTotal quantity of goods and services supplied. Aggregate Supply CurveCombinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not. All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the American-style optionAn option contract that can be exercised at any time between the date of purchase and Asset/equity ratioThe ratio of total assets to stockholder equity. Asset/liability managementAlso called surplus management, the task of managing funds of a financial ![]() Back-up1) When bond yields and prices fall, the market is said to back-up. Bank lineline of credit granted by a bank to a customer. BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Capital market line (CML)The line defined by every combination of the risk-free asset and the market portfolio. Cash flow time-lineline depicting the operating activities and cash flows for a firm over a particular period. Cash management billVery short maturity bills that the Treasury occasionally sells because its cash Certified Management Accountant (CMA)a professional designation in the area of management accounting that ![]() Characteristic lineThe market model applied to a single security. The slope of the line is a security's beta. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Contra-equity accountAn account that reduces an equity account. An example is Treasury stock. Corporate financial managementThe application of financial principals within a corporation to create and cost management system (CMS)a set of formal methods Cost of EquitySame as the cost of common stock. Sometimes viewed as the CouponThe periodic interest payment made to the bondholders during the life of the bond. CouponDetachable certificate attached to a bond that shows the amount of couponThe interest payments paid to the bondholder. CouponThe annual interest payment associated with a bond. Coupon BondAny bond with a coupon. Contrast with discount bond. Coupon / CouponsThe periodic interest payment(s) made by the issuer of a bond Coupon datesThe dates when the coupons are paid. Typically a bond pays Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Coupon paymentsA bond's interest payments. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Coupon RateThe rate of interest paid on a debt security. Generally stated on an Coupon rateThe nominal interest rate that the issuer promises to pay the coupon rateAnnual interest payment as a percentage of face value. Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Current-coupon issuesRelated: Benchmark issues Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. debt-to-equity ratioA widely used financial statement ratio to assess the Deferred equityA common term for convertible bonds because of their equity component and the Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Dual syndicate equity offeringAn international equity placement where the offering is split into two Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Earnings ManagementThe active manipulation of earnings toward a predetermined target. EquityRepresents ownership interest in a firm. Also the residual dollar value of a futures trading account, EquityFunds raised from shareholders. EquityAmounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings). equityRefers to one of the two basic sources of capital for a business, the EquityThe difference between the total of all recorded assets and liabilities on the balance EquityOwnership. Common stock represents equity in a corporation. EquityThe net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably. equityThe net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities. Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Equity Buy-BackRefers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount. Equity capAn agreement in which one party, for an upfront premium, agrees to compensate the other at Equity claimAlso called a residual claim, a claim to a share of earnings after debt obligation have been Equity collarThe simultaneous purchase of an equity floor and sale of an equity cap. Equity contribution agreementAn agreement to contribute equity to a project under certain specified Equity floorAn agreement in which one party agrees to pay the other at specific time periods if a specific Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Equity kickerUsed to refer to warrants because they are usually issued attached to privately placed bonds. Equity-linked policiesRelated: Variable life Equity marketRelated:Stock market Equity MethodAccounting method for an equity security in cases where the investor has sufficient Equity multiplierTotal assets divided by total common stockholders' equity; the amount of total assets per Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. Equity swapA swap in which the cash flows that are exchanged are based on the total return on some stock EquityholdersThose holding shares of the firm's equity. equivalent units of production (EUP)an approximation of the number of whole units of output that could have been Euro lineslines of credit granted by banks (foreign or foreign branches of U.S. banks) for Eurocurrencies. Euroequity issuesSecurities sold in the Euromarket. That is, securities initially sold to investors European-style optionAn option contract that can only be exercised on the expiration date. Evening upBuying or selling to offset an existing market position. Excess SupplyA situation in which supply exceeds demand. Floating supplyThe amount of securities believed to be available for immediate purchase, that is, in the Foreign Corrupt Practices Act (FCPA)a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and Foreign equity marketThat portion of the domestic equity market that represents issues floated by foreign companies. Formalized Line of CreditA contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year. Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. GEMs (growing-equity mortgages)Mortgages in which annual increases in monthly payments are used to Give upThe loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon Group Life InsuranceThis is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates. Group of five (G5/G-5) The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that Group of seven (G7/G-7)The G-5 countries plus Canada and Italy. Group rotation managerA top-down manager who infers the phases of the business cycle and allocates High-coupon bond refundingRefunding of a high-coupon bond with a new, lower coupon bond. Institute of Management Accountants (IMA)an organization composed of individuals interested in the field of management accounting; it coordinates the Certified management Investment product line (IPML)The line of required returns for investment projects as a function of beta Investor's equityThe balance of a margin account. Related: buying on margin, initial margin requirement. Legal bankruptcyA legal proceeding for liquidating or reorganizing a business. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |