SettingsBasic financial concepts
Adjusted present value
Adjusted Present Value (APV) is a business valuation method.
Adjusted Present Value (APV) is a business valuation method.
Amortization (business)
In business, amortization refers to two separate processes: Amortization of loans and amortization of intangible assets.
In business, amortization refers to two separate processes: Amortization of loans and amortization of intangible assets.
Amortization calculator
An amortization calculator is used to determine the periodic payment amount due on a loan, based on the amortization process.
An amortization calculator is used to determine the periodic payment amount due on a loan, based on the amortization process.
Amortization schedule
An amortization schedule is a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator.
An amortization schedule is a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator.
Ask price
Ask price, also called offer price, offer, asking price, or simply ask, is the price a seller of a good is willing to accept for that particular good.
Ask price, also called offer price, offer, asking price, or simply ask, is the price a seller of a good is willing to accept for that particular good.
Balloon payment
The term balloon payment arises because if you hold back most of a debt and pay it only towards the end of the agreement, both those last payments and the total amount repaid are much larger.
The term balloon payment arises because if you hold back most of a debt and pay it only towards the end of the agreement, both those last payments and the total amount repaid are much larger.
Base effect (inflation)
The Base effect relates to inflation in the corresponding period of the previous year.
The Base effect relates to inflation in the corresponding period of the previous year.
Bid price
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good.
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good.
Buydown
A buydown is a mortgage financing technique where the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage.
A buydown is a mortgage financing technique where the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage.
Buyer's credit
Buyer's credit is the credit availed by an importer (buyer) from overseas lenders, i.e. banks and financial institutions for payment of his imports on due date.
Buyer's credit is the credit availed by an importer (buyer) from overseas lenders, i.e. banks and financial institutions for payment of his imports on due date.
Capitalization rate
Capitalization rate is the ratio between the net operating income produced by an asset and its capital cost or alternatively its current market value.
Capitalization rate is the ratio between the net operating income produced by an asset and its capital cost or alternatively its current market value.
Cash accumulation equation
The cash accumulation equation is an equation which calculates how much money will be in a bank account, at any point in time.
The cash accumulation equation is an equation which calculates how much money will be in a bank account, at any point in time.
Cash flow
Cash flow is the movement of money into or out of a business, project, or financial product.
Cash flow is the movement of money into or out of a business, project, or financial product.
Collateral (finance)
In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.
In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.
Compound annual growth rate
Compound annual growth rate is a business and investing specific term for the smoothed annualized gain of an investment over a given time period.
Compound annual growth rate is a business and investing specific term for the smoothed annualized gain of an investment over a given time period.
Compound interest
Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest.
Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest.
Contango
Contango refers to the market condition wherein the price of a forward or futures contract is trading above the present spot price.
Contango refers to the market condition wherein the price of a forward or futures contract is trading above the present spot price.
Deleveraging
In finance, leverage is a general term for any technique to multiply gains and losses.
In finance, leverage is a general term for any technique to multiply gains and losses.
Discounted cash flow
In finance, discounted cash flow (DCF) analysis is a method of valuing a project, company, or asset using the concepts of the time value of money.
In finance, discounted cash flow (DCF) analysis is a method of valuing a project, company, or asset using the concepts of the time value of money.
Discounting
Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.
Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.
Domestic liability dollarization
Domestic liability dollarization (DLD) refers to the denomination of banking system deposits and lending in a currency other than that of the country in which they are held.
Domestic liability dollarization (DLD) refers to the denomination of banking system deposits and lending in a currency other than that of the country in which they are held.
Down payment
Down payment (or downpayment) is a payment used in the context of the purchase of expensive items such as a car and a house, whereby the payment is the initial upfront portion of the total amoun...
Down payment (or downpayment) is a payment used in the context of the purchase of expensive items such as a car and a house, whereby the payment is the initial upfront portion of the total amoun...
Downside risk
Downside risk is the financial risk associated with losses.
Downside risk is the financial risk associated with losses.
Earnings growth
Earnings growth is the annual rate of growth of earnings from investments.
Earnings growth is the annual rate of growth of earnings from investments.
Earnings per share
Earnings per share (EPS) is the amount of earnings per each outstanding share of a company's stock.
Earnings per share (EPS) is the amount of earnings per each outstanding share of a company's stock.
Equity (finance)
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid.
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid.
Eurodollar
Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve.
Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve.
Financial risk
Financial risk an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans in risk of default.
Financial risk an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans in risk of default.
Financial transaction
A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment.
A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment.
Flows to equity
The Flow to Equity-Approach is one of three commonly used discounted-cash-flow (DCF) methods of corporate valuation, the other two are Adjusted Present Value and Weighted Average Cost of Capital...
The Flow to Equity-Approach is one of three commonly used discounted-cash-flow (DCF) methods of corporate valuation, the other two are Adjusted Present Value and Weighted Average Cost of Capital...
Forecast period (finance)
In finance, the forecast period is the time period in which the individual yearly cash flows are input to the discounted cash flow formula.
In finance, the forecast period is the time period in which the individual yearly cash flows are input to the discounted cash flow formula.
Future value
Future value is the value of an asset at a specific date.
Future value is the value of an asset at a specific date.
Future-oriented
Future-oriented is a term used in finance and economics to describe agents that discount the future lightly and so have a low discount rate, or equivalently a high discount factor.
Future-oriented is a term used in finance and economics to describe agents that discount the future lightly and so have a low discount rate, or equivalently a high discount factor.
Holding period return
In finance, holding period return (HPR) is the total return on an asset or portfolio over the period during which it was held.
In finance, holding period return (HPR) is the total return on an asset or portfolio over the period during which it was held.
Income tax audit
An income tax audit is the examination of a business or individual tax return by the IRS or state tax authority.
An income tax audit is the examination of a business or individual tax return by the IRS or state tax authority.
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
Letter of credit
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking.
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking.
Leverage (finance)
In finance, leverage is a general term for any technique to multiply gains and losses.
In finance, leverage is a general term for any technique to multiply gains and losses.
Leverage cycle
The Leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle.
The Leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle.
Lodgement (finance)
In Ireland a lodgement is an amount lodged to a bank account or "paid in" to a bank account via a "lodgement slip" or "paying in" slip.
In Ireland a lodgement is an amount lodged to a bank account or "paid in" to a bank account via a "lodgement slip" or "paying in" slip.
Maturity (finance)
In finance, maturity or maturity date refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.
In finance, maturity or maturity date refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.
Mortgage calculator
Mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow on a piece of real estate.
Mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow on a piece of real estate.
Natural resources consumption tax
The natural resources consumption tax is a kind of tax to help ensure the long run sustainability by making people be more aware of natural resource consumption.
The natural resources consumption tax is a kind of tax to help ensure the long run sustainability by making people be more aware of natural resource consumption.
Negative gearing
Negative gearing is a form of leveraged speculation in which a speculator borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan.
Negative gearing is a form of leveraged speculation in which a speculator borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan.
Net (economics)
In economics, net means after deductions.
In economics, net means after deductions.
Net present value
In finance, the net present value or net present worth of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values of the individual cash flows ...
In finance, the net present value or net present worth of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values of the individual cash flows ...
Participation (ownership)
In particular, loan participation is a cooperation of multiple lenders to issue a loan (known as participation loan) to one borrower.
In particular, loan participation is a cooperation of multiple lenders to issue a loan (known as participation loan) to one borrower.
Present value
Present value, also known as present discounted value, is the value on a given date of a payment or series of payments made at other times.
Present value, also known as present discounted value, is the value on a given date of a payment or series of payments made at other times.
Present value of benefits
Present value of benefits is a term used in cost-benefit analysis and project appraisal that refers to the discounted sum, or Present value, of a stream of benefits associated with a project or ...
Present value of benefits is a term used in cost-benefit analysis and project appraisal that refers to the discounted sum, or Present value, of a stream of benefits associated with a project or ...
Present value of costs
Present value of costs is a term used in cost-benefit analysis and project appraisal that refers to the discounted sum, or Present value, or a stream of costs associated with a project or proposal.
Present value of costs is a term used in cost-benefit analysis and project appraisal that refers to the discounted sum, or Present value, or a stream of costs associated with a project or proposal.
Price
In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.
In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.
Rate of return
In finance, rate of return, also known as return on investment, rate of profit or sometimes just return, is the ratio of money gained or lost on an investment relative to the a...
In finance, rate of return, also known as return on investment, rate of profit or sometimes just return, is the ratio of money gained or lost on an investment relative to the a...
Real versus nominal value (economics)
In economics, nominal value refers to a value expressed in money terms (that is, in units of a currency) in a given year or series of years.
In economics, nominal value refers to a value expressed in money terms (that is, in units of a currency) in a given year or series of years.
Refinancing risk
In banking and finance, refinancing risk is the possibility that a borrower cannot refinance by borrowing to repay existing debt.
In banking and finance, refinancing risk is the possibility that a borrower cannot refinance by borrowing to repay existing debt.
Return On Event
Return on Event (ROE) is a term used in event marketing, compared to rate of return ROR, also known as return on investment ROI, which is the ratio of money gained or lost on an investment.
Return on Event (ROE) is a term used in event marketing, compared to rate of return ROR, also known as return on investment ROI, which is the ratio of money gained or lost on an investment.
Return on event
Return on event is a term used in event marketing, compared to rate of return ROR, also known as return on investment ROI, which is the ratio of money gained or lost on an investment.
Return on event is a term used in event marketing, compared to rate of return ROR, also known as return on investment ROI, which is the ratio of money gained or lost on an investment.
Return on Investment
In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether r...
In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether r...
Rolling (finance)
Rolling a contract is an investment concept meaning trading out of a standard contract and then buying the contract with next longest maturity, so as to maintain a position with constant maturity.
Rolling a contract is an investment concept meaning trading out of a standard contract and then buying the contract with next longest maturity, so as to maintain a position with constant maturity.
Same-day affirmation
Same-day affirmation (SDA) refers to completing the entire trade verification process on the same day that the actual trade took place.
Same-day affirmation (SDA) refers to completing the entire trade verification process on the same day that the actual trade took place.
T-Model
The T-Model is a formula that states the returns earned by holders of a company's stock in terms of accounting variables obtainable from its financial statements.
The T-Model is a formula that states the returns earned by holders of a company's stock in terms of accounting variables obtainable from its financial statements.
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law.
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law.
Tax audit representation
Tax audit representation, also called audit defense, is when a tax or legal professional stands in on behalf of a taxpayer during an IRS or state income tax audit.
Tax audit representation, also called audit defense, is when a tax or legal professional stands in on behalf of a taxpayer during an IRS or state income tax audit.
Tax compliance software
Tax compliance software is software that ensures tax compliance for income tax, corporate tax, VAT, service tax, customs, sales tax, use tax, or other taxes it's users may be required to pay.
Tax compliance software is software that ensures tax compliance for income tax, corporate tax, VAT, service tax, customs, sales tax, use tax, or other taxes it's users may be required to pay.
Tax shield
A tax shield is the reduction in income taxes that results from taking an allowable deduction from taxable income.
A tax shield is the reduction in income taxes that results from taking an allowable deduction from taxable income.
Taxpayers' money
The term Taxpayers money can refer to one of two things.
The term Taxpayers money can refer to one of two things.
Terminal value (finance)
In finance, the terminal value of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever.
In finance, the terminal value of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever.
Time value of money
The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time.
The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time.
Unit price
Average price per unit and prices per statistical unit are needed by marketers who sell the same product in different packages, sizes, forms, or configurations at a variety of different prices.
Average price per unit and prices per statistical unit are needed by marketers who sell the same product in different packages, sizes, forms, or configurations at a variety of different prices.
Unitax
Unitax ("unified national indirect taxation") is a system of national revenue (complemented by ulitax - "unified local indirect taxation") based on non-monetary, energy value, units of assessment.
Unitax ("unified national indirect taxation") is a system of national revenue (complemented by ulitax - "unified local indirect taxation") based on non-monetary, energy value, units of assessment.
User charge
A user charge is a charge for the use of a product or service.
A user charge is a charge for the use of a product or service.
Valuation using discounted cash flows
Valuation using discounted cash flows is a method for determining the current value of a company using future cash flows adjusted for time value.
Valuation using discounted cash flows is a method for determining the current value of a company using future cash flows adjusted for time value.