Financial Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit...

• Browse terms by the Alphabetical Index:
  1 4 A B C D E F G H I J K L M N O P Q R S T U V W Y Z

• Search terms for definitions using keywords:
  Keyword(s):

Monthly Financial Term Picks:

After-tax profit margin

The ratio of net income to net sales.

Diversifiable risk

Related: unsystematic risk.

Draft

An unconventional order in writing - signed by a person, usually the exporter, and addressed to the
importer - ordering the importer or the importer's agent to pay, on demand (sight draft) or at a fixed future
date (time draft), the amount specified on its face.

Economic rents

Profits in excess of the competitive level.

International market

Related: See external market.

Medium-term note

A corporate debt instrument that is continuously offered to investors over a period of
time by an agent of the issuer. Investors can select from the following maturity bands: 9 months to 1 year,
more than 1 year to 18 months, more than 18 months to 2 years, etc., up to 30 years.

Price/sales ratio (PS Ratio)

Determined by dividing current stock price by revenue per share (adjusted for stock splits).
Revenue per share for the P/S ratio is determined by dividing revenue for past 12 months by number of shares
outstanding.

Tax clawback agreement

An agreement to contribute as equity to a project the value of all previously
realized project-related tax benefits not already clawed back to the extent required to cover any cash
deficiency of the project.

Wallflower

Stock that has fallen out of favor with investors; tends to have a low P/E (price to earnings ratio).

investment decision

a judgment about which assets will be
acquired by an entity to achieve its stated objectives

Yield curve

Graph of yields (vertical axis) of a particular type of security
versus the time to maturity (horizontal axis). This curve usually slopes
upward, indicating that investors usually expect to receive a premium for
securities that have a longer time to maturity. The benchmark yield curve is
for U.S. Treasury securities with maturities ranging from three months to 30
years. See Term structure.

Cost-Benefit Analysis

The calculation and comparison of the costs and benefits of a policy or project.

Countercyclical

Falling during expansions and rising during recessions. A countercyclical policy stimulates during a recession and contracts during an expansion.

Marginal Propensity to Save

Fraction of an increase in disposable income that is saved.

Regular Investment Plan (RIP)

A plan under which you may make regular deposits of the same amount to your Mutual Funds account once a month, once every 2 weeks, or once a week. You can also make regular deposits up to four times a month on any dates you choose.