OF LOAN TERMS
process of writing off or liquidating an asset or loan periodically
on an installment basis.
that represent obligation for certain services for which payments
are yet to be made and are indirect sources of financing.
series of receipts or payments of a fixed amount for a specified
number of years. Alternatively, a pattern of cash flows that are
equal in each year, that is, equal annual cash flow.
of buying an asset/security in one market and selling simultaneously
in another. This restores equilibrium in markets that are temporarily
out of equilibrium.
resources owned by a business, which were acquired at a measurable
that are not collectible and therefore, proves to be of no worth
to the creditor.
statement of assets and liabilities at a specified date.
paid in form of equity share and not in cash.
to short-term loan to fund temporary needs as long as permanent
financing is not available.
plan that illustrates the current business strata of an organization
and its future plans towards the achievement of its organizational
put into the business transactions.
Asset Pricing Model (CAPM)
explains the behavior of security prices and provides a mechanism
could assess the impact of a proposed security investment on the
overall portfolio risk and return.
rate of interest (discount) employed to calculate the present value
of future cash flows. This is the rate that investors expect.
channel through which savings become available for industrial investment.
actual receipts and payments by a firm.
that are offered as a security for the repayment of a loan or other
is the average period taken to collect receivables. It is equal
to the number of days in a year divided by debtors' turnover (total
credit sales/average debtors).
sheet or income statement in which items are expressed in percentage
rather than in home currency.
Cash Flow Pattern
pattern of cash flows in which an initial outlay is followed by
a series of cash inflows.
is the stated rate of interest on a bond or debenture.
binding agreement promising to do or not to do a particular thing.
process of determining whether an applicant satisfies the credit
standards of a firm and the amount of credit that should be extended
minimum criterion for the extension of a credit to a customer.
that can be converted in the ordinary course of business into cash
within a year, length, or operating cycle, which is higher.
which are intended to be paid within a year, in the ordinary course
of business from the date of inception.
measure of liquidity, it is the ratio of current assets and current
that measure the ability of a firm to meet its fixed obligations.
amount of money borrowed or owed by one party to another. Example,
loans, commercial paper, and bonds.
ratio of debt to equity. It is a measure of long-term financial
position of a firm.
Service Coverage Ratio
of total cash operating funds available to service debt obligations.
of expected returns from a security attributable to possible changes
in the financial capacity of the issuer to make future payments
to the security owner.
situation where one fails to make payment, which can lead to foreclosure.
It is a fund containing
assets whose use is restricted only to the income earned by these
funds provided by the owner of a firm and consist of ordinary share
capital and retained earnings.
is an agreement in which receivables arising out of a sale of goods/services
are sold by a firm (client) to the factor (a financial intermediary)
because of which title to the goods/services represented by the
said receivables passes on to the factor.
involves a relatively long-term commitment on the part of the lessee.
amount of money tied up in cheques that have been drawn but have
not been collected.
incurred in issuing securities. For e.g. underwriting & brokerage
costs, printing, legal, publicity, etc.
this case, a third party guarantees the payment of a loan if the
borrower fails to perform.
the short-term requirements of funds by short-term and long-term
requirements by long-term funds.
are short-term deposits with other corporate firms.
Rate of Return
rate of return that equates the present value of future cash flows
to the initial investment on the project.
lease arrangement, which involves a third party, which is a lender
in addition to the lessor and lessee (also referred to as third-party
shareholders' liability limited to the amount invested in the business.
bank agreement stating a company may borrow at any time up to the
written contract between a lender and a borrower, stating the rights
and obligations of both the parties in regards to a specified loan.
set out by the board of directors of a company to meet unanticipated
future loan losses. These reserves are not used for lending purposes.
is determined on the basis of the stock market quotation of the
Working Capital/Net Worth
excess of current assets over current liabilities.
Certificates of Deposits
It is a marketable receipt
of funds deposited in a bank for a fixed period.
Hidden form of debt
without being shown as a liability.
return that would have been obtained from an alternative investment.
provides its holder with an opportunity to purchase or sell a specified
number of shares at a stated price or on before a specified period.
form of tender offer under which the firm under attack becomes the
group of assets or investments held by an investor, Investment Company
or a financial institution. For example, bonds, stocks, mutual funds,
amount of money upon which interest is calculated.
written agreement sent by the borrower to the lender promising him
to repay a specified sum of money at a stated time.
owed to a business by customers who have bought goods or services
on ordinary extension of credit.
right to demand payment from the guarantor of a commercial paper
when the borrower fails to pay.
changes in the original agreement with the consent of the parties
situation where parties to the contract agree to carry over the
loan for another stated period at the time of maturity.
minimum level of inventory that provides a cushion against the possibility
of being out-of-stock because of change in demand.
thing offered or given to fulfill the performance of a contract.
For example, real estate, stocks, fixed assets, jewelry, etc.
of paying bills as late as possible so long as the firm's rating
is not damaged, taking into account any cash discount offered.
The tenure of the policy.
These are bearer obligation
of the government.
of the Firm
value of a firm's debt and equity.
option that gives right to its holder to purchase a specified number
of equity shares at a pre-decided price over a certain period.
Assets plus Current Liabilities.
company that comes to the rescue of a firm that is being targeted
for a takeover.
consider as a loss or failure in case of uncollectible investments.
actual return received by an investor.
bond that does not pay any interest. It is issued at a price lower
than its maturity values.
Credit Bank Loans
Loans No Fax