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Profiling |
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Definition of ProfilingProfilingA method of budgeting that takes into account seasonal fluctuations and estimates of when revenues will be earned and costs will be incurred over each month in the budget period.
Related Terms:PPF (periodic perpetuity factor)a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity. Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Accounting exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accounting earningsEarnings of a firm as reported on its income statement. Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on Accounting liquidityThe ease and quickness with which assets can be converted to cash. Accounts payableMoney owed to suppliers. Accounts receivableMoney owed by customers. Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how Agency costsThe incremental costs of having an agent make decisions for a principal. Annualized holding period returnThe annual rate of return that when compounded t times, would have Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset turnoverThe ratio of net sales to total assets. Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total BudgetA detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget. Budget deficitThe amount by which government spending exceeds government revenues. Capital accountNet result of public and private international investment and lending activities. Capital budgetA firm's set of planned capital expenditures. Capital budgetingThe process of choosing the firm's long-term capital assets. Capitalization methodA method of constructing a replicating portfolio in which the manager purchases a Carring costscosts that increase with increases in the level of investment in current assets. Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Compounding periodThe length of the time period (for example, a quarter in the case of quarterly Concentration accountA single centralized account into which funds collected at regional locations Contract monthThe month in which futures contracts may be satisfied by making or accepting a delivery. CoverThe purchase of a contract to offset a previously established short position. Coverage ratiosRatios used to test the adequacy of cash flows generated through earnings for purposes of Covered callA short call option position in which the writer owns the number of shares of the underlying Covered call writing strategyA strategy that involves writing a call option on securities that the investor Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Covered PutA put option position in which the option writer also is short the corresponding stock or has Credit periodThe length of time for which the customer is granted credit. Crossover rateThe return at which two alternative projects have the same net present value. Cumulative Translation Adjustment (CTA) accountAn entry in a translated balance sheet in which gains Current accountNet flow of goods, services, and unilateral transactions (gifts) between countries. Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided Direct estimate methodA method of cash budgeting based on detailed estimates of cash receipts and cash Discount periodThe period during which a customer can deduct the discount from the net amount of the bill Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an Discretionary accountaccounts over which an individual or organization, other than the person in whose Doctrine of sovereign immunityDoctrine that says a nation may not be tried in the courts of another country Evaluation periodThe time interval over which a money manager's performance is evaluated. Execution costsThe difference between the execution price of a security and the price that would have Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed-charge coverage ratioA measure of a firm's ability to meet its fixed-charge obligations: the ratio of Flow-through methodThe practice of reporting to shareholders using straight-line depreciation and Forward coverPurchase or sale of forward foreign currency in order to offset a known future cash flow. Friction costscosts, both implied and direct, associated with a transaction. Such costs include time, effort, Generally Accepted Accounting Principals (GAAP)A technical accounting term that encompasses the GoodwillExcess of the purchase price over the fair market value of the net assets acquired under purchase Government bondSee: Government securities. Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan Government securitiesNegotiable U.S. Treasury securities. Holding periodLength of time that an individual holds a security. Holding period returnThe rate of return over a given period. Incremental costs and benefitscosts and benefits that would occur if a particular course of action were Information costsTransaction costs that include the assessment of the investment merits of a financial asset. Interest coverage ratioThe ratio of the earnings before interest and taxes to the annual interest expense. This Interest coverage testA debt limitation that prohibits the issuance of additional long-term debt if the issuer's Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory IRA/Keogh accountsSpecial accounts where you can save and invest, and the taxes are deferred until money Joint accountAn agreement between two or more firms to share risk and financing responsibility in Log-linear least-squares methodA statistical technique for fitting a curve to a set of data points. One of the Margin account (Stocks)A leverageable account in which stocks can be purchased for a combination of Market impact costsAlso called price impact costs, the result of a bid/ask spread and a dealer's price concession. Market overhangThe theory that in certain situations, institutions wish to sell their shares but postpone the Market timing costscosts that arise from price movement of the stock during the time of the transaction Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts Money market demand accountAn account that pays interest based on short-term interest rates. Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. Multiperiod immunizationA portfolio strategy in which a portfolio is created that will be capable of Net periodThe period of time between the end of the discount period and the date payment is due. Neutral periodIn the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not Normalizing methodThe practice of making a charge in the income account equivalent to the tax savings Omnibus accountAn account carried by one futures commission merchant with another futures commission Open accountArrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, Opportunity costsThe difference in the performance of an actual investment and a desired investment Overbought/oversold indicatorAn indicator that attempts to define when prices have moved too far and too Overfunded pension planA pension plan that has a positive surplus (i.e., assets exceed liabilities). Overlay strategyA strategy of using futures for asset allocation by pension sponsors to avoid disrupting the Overnight delivery riskA risk brought about because differences in time zones between settlement centers Overnight repoA repurchase agreement with a term of one day. Overperformwhen a security is expected to appreciate at a rate faster than the overall market. Overreaction hypothesisThe supposition that investors overreact to unanticipated news, resulting in OvershootingThe tendency of a pool of MBSs to reflect an especially high rate or prepayments the first time Oversubscribed issueInvestors are not able to buy all of the shares or bonds they want, so underwriters must Oversubscription privilegeIn a rights issue, arrangement by which shareholders are given the right to apply Over-the-counter market (OTC)A decentralized market (as opposed to an exchange market) where Portfolio turnover rateFor an investment company, an annualized rate found by dividing the lesser of Price discovery processThe process of determining the prices of the assets in the marketplace through the Price impact costsRelated: market impact costs Purchase accountingmethod of accounting for a merger in which the acquirer is treated as having purchased
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