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Definition of Assets
A firm's productive resources.
Anything of value that a company owns.
Items owned by the company or expenses that have been paid for but have not been used up.
Things that the business owns.
A merger or consolidation in which an acquirer purchases the selling firm's assets.
A common element of a financial plan that describes projected capital spending and the
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Current refers to cash and those assets that will be turned
Cash and other company assets that can be readily turned into cash within one year.
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Claims on real assets.
Claims to the income generated by real assets. Also called securities.
Things that the business owns and are part of the business infrastructure – fixed assets may be
An informal term that refers to the variety of long-term operating
Land, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation.
A measure of the utilization of a company's fixed assets to
assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
Value of property, equipment and other capital assets minus the depreciation. This is an
Longer-Term Fixed Assets
assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
A cluster of accounts that are listed after fixed assets on the balance sheet,
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
assets, the title of which are held personally rather than in the name of some other legal entity.
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Publicly traded assets
assets that can be traded in a public market, such as the stock market.
Current assets minus inventories.
RATE OF RETURN ON TOTAL ASSETS
The percentage return or profit that management made on each dollar of assets. The formula is:
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
assets used to produce goods and services.
Realizable Revenue A revenue transaction where assets received in exchange for goods and
services are readily convertible into known amounts of cash or claims to cash.
A tangible asset with physical properties that can be reproduced, such as a building or
assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
return on assets (ROA)
Although there is no single uniform practice for
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Return on Total Assets Ratio
A measure of the percentage return earned on the value of the
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
Total Debt to Total Assets Ratio
See debt ratio
The percent of a mutual fund's assets used to defray marketing and distribution expenses. The
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula assets = Liabilities + Equity.
An equation that reflects the two-sided nature of a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Well, frankly, accrual is not a good descriptive
A contra, or offset, account that is coupled
Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid
A ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula:
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
Takeover of a firm by purchase of that firm’s common
Aggressive Capitalization Policies
Capitalizing and reporting as assets significant portions of
Aggressive Cost Capitalization
Cost capitalization that stretches the flexibility within generally
See depreciation, but usually in relation to assets attached to leased property.
Reduction in value of an asset over some period for accounting
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and
A “snapshot” statement that freezes a company on a particular day, like the last day of the year, and shows the balances in its asset, liability, and stockholders’ equity accounts. It’s governed by the formula:
A financial statement showing the financial position of a business – its assets, liabilities and
One of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The Balance Sheet is prepared using the balances at the end of a specific day.
A term often used instead of the more formal and correct
A report that summarizes all assets, liabilities, and equity for a company
Financial statement that shows the value of the
A financial report showing the status of a company's assets, liabilities, and owners' equity on a given date.
Balance sheet identity
Total assets = Total Liabilities + Total Stockholders' Equity
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
This is the person who benefits from the terms of a trust, a will, an RRSP, a RRIF, a LIF, an annuity or a life insurance policy. In relation to RRSP's, RRIF's, LIF's, Annuities and of course life insurance, if the beneficiary is a spouse, parent, offspring or grand-child, they are considered to be a preferred beneficiary. If the insured has named a preferred beneficiary, the death benefit is invariably protected from creditors. There have been some court challenges of this right of protection but so far they have been unsuccessful. See "Creditor Protection" below. A beneficiary under the age of 18 must be represented by an individual guardian over the age of 18 or a public official who represents minors generally. A policy owner may, in the designation of a beneficiary, appoint someone to act as trustee for a minor. Death benefits are not subject to income taxes. If you make your beneficiary your estate, the death benefit will be included in your assets for probate. Probate filing fees are currently $14 per thousand of estate value in British Columbia and $15 per thousand of estate value in Ontario.
A street-smart term that refers to the practice by many businesses
A wholesale write-down of assets and accrual of liabilities in an effort to make the
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Net worth of the firm’s assets or liabilities according
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:
An agent who handles public orders to buy or sell financial assets.
Business Expansion Investment
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
The shareholders’ investment in the business; the difference between the assets and liabilities
A very broad term rooted in economic theory and referring to
Expenditures Purchases of productive long-lived assets, in particular, items of property,
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