| A | B |
|---|
| Accelerated Depreciation | allows businesses to depreciate their assets faster in earlier years, thus depreciating less in later years |
| Acquisition | takeover of one company/entity by another |
| Capital Budgeting | process of determining if a new project is worth pursuing for a company |
| Capital Expenditures | funds used to acquire or upgrade physical assets such as property, industrial buildings or equipment |
| Capital Markets | markets for buying and selling equity and debt instruments |
| Cash Budget | itemization of projected cash source and use of cash in the future |
| Cash Flow | representation of a company’s operating, investing and financial activities over a period of time |
| Cash Planning | method of planning ahead, consolidating the flow of liquid assets and getting the best possible return |
| Comparative Ratio Analysis | method used to assess financial performance for a company |
| Concentric Merger | when two companies which operate within the same general industry merge; companies may serve the same customers, but they do not offer the same product or service |
| Conglomerate Merger | when two companies from completely different industries merge |
| Corporate Bond | debt security issued by a corporation and sold to investors |
| Corporate Finance | study of the money-related decisions of a business |
| Debt Ratio | solvency ratio which measures a company’s total liabilities as a percentage of its total assets |
| Debt/Equity Ratio | compares total debt to total equity for a company |
| Depreciation | indicates how much of an asset’s value has been expensed over its useful life by a company |
| Discount Cash Flow | determines a company's current value according to the estimated future cash flow |
| Dividends | distribution of a portion of a company’s earnings, determined by the board of directors |
| Dividend Reinvestment Plan | when a corporation allows investors to reinvest their cash dividend by purchasing additional shares |
| Double-Declining-Balance Method | used to accelerate depreciation in a company within the first few years of an asset’s useful life |
| Enterprise-Value-to-Sales Ratio | ratio measures the comparison of the enterprise value of a company to the company’s sales |
| Equity Ratio | ratio measures the amount of corporate assets which are financed by owner’s investments |
| Horizontal Merger | occurs when a company merges with another which offers the same product lines or services |
| Hostile Takeover | corporate acquisition or merger executed against the wishes of the board |
| Hybrid Dividend Policy | combination of residual and stability dividend policy |
| Internal Rate of Return (IRR) | interest rate at which the net present value of cash flows equal zero |
| Leverage Ratio | ratio provides information about how a company finances their operation using a mixture of owners’ equity and debt |
| Long-Term Debt | consists of loans and financial obligations of the company lasting over one year |
| Merger | occurs when two companies join together to form a new joint organization |
| Net Present Value (NPV) | present value of corporate cash inflow versus the present value of cash outflow |
| Operating Cash Flow | measures the amount of cash generated by a company’s normal business operations |
| Payback Period | length of time required to recover the cost of an investment for a company |
| Price-Earnings Ratio | measures a company’s current share price to its per share earnings |
| Profit Planning | outlines the planned sales revenue, expenses and net income or loss for a time period for a company |
| Pro Forma Statement | process of presenting corporate financial projections for a time period |
| Proxy Fight | group of persuaded shareholders which joins forces and gathers enough shareholder proxies to win a corporation vote |
| Replacement Cost | cost to replace the assets or property of a company of the same or equal value |
| Residual Dividends Policy | refers to the method of calculating corporate dividends; provides investors with dividends at a usual rate |
| Reverse Merger | simpler, shorter and less expensive method for a company to go public |
| Shareholder | person or company which owns at least one share of a company’s stock |
| Shell Company | company without active business operations or assets |
| Short-Term Financial Plans | designed to meet corporate budget and investment goals within one fiscal year |
| Solvency Ratio | measures a company’s ability to sustain operations indefinitely by comparing debt levels with equity, assets and earnings |
| Stability Dividend Policy | change of corporate dividends created by the residual policy |
| Stock Split | occurs when a company divides its existing shares into multiple shares |
| Straight-Line Depreciation | most common and simplest method used to calculate corporate depreciation |
| Sum-of-Year Method | used to accelerate the recognition of depreciation for a company |
| Synergy | created by the merger or acquisition of a company |
| Tender Offer | offer to purchase some or all of the shareholder’s share in a corporation |
| Terminal Cash Flow | final cash flow at the end of the project’s life; represents the after-tax corporate proceeds |
| Unit-of-Production Depreciation | method calculates depreciation based on the amount of usage or output of an asset of a corporation |
| Valuation | process of determining the current worth of a company’s asset; used in evaluating the potential merits of an investment |
| Vertical Merger | when a company acquires or merges with another in the same value chain, producing or distributing the same goods and services |
