Archive | Finance Dictionary RSS feed for this section

This share of stock features rental rights but no control rights over the company. The lack of authority generally provides a discount in price

An investor deciding not to sell or act upon an option at the end of the contract. Also:

the voluntary relinquishment of all rights, title, or claim to property that rightfully belongs to the owner of the property. Stocks, bonds or mutual funds held in a brokerage account where the owner can’t be located or contacted is an example of abandonment. The laws of escheat may cause the property to be taken control by the state.

The abandonment clause gives insured parties the right to forfeit damaged property in exchange for full payment. Insurance companies take ownership of the damaged asset.

The amount earned if an investment is discontinued. The general rule for this situation is that if the amount received for scrap or salvage is more than the net present value (NPV) the project is abandoned.

1. Commerce: a reduction in the amount of a bill due to factors such as demurrage, overtime penalty, or rent. 2. Environment: to reduce or eliminate polluting or hazardous substances. This is done by removing them or considering a new plan of more efficient waste management. 3. Legal: A court decision that is suspended, or simply closing the case before the final decision is reached. 4. Taxation: A rebate given under special circumstances such as in aftermath of natural disasters.

A cost that occurs because a company creates a negative byproduct. This byproduct must be removed or the effect must be reduced.

A simplified financial statement that a specific small firm is allowed to file. It is filed with the registrar of companies in the United Kingdom. Almost half of the active UK firms have chosen abbreviated accounts for their companies. Another term for abridged accounts.

Purchasing items in wholesale in order to sell them as retail. This prevents competitors from buying the good creating a monopoly. Abbroachment is another term for this business transaction.

When an employee and brokerage firm do business this is the resulting contract. It is done in the form of an outline that lists the rights of the firm. This agreement is applied when an employee opts into the New York Stock Exchange.

A systems analysis of items in order of importance that should be handled differently. This form of Pareto analysis in which the importance is listed by ‘A’ items are very important, ‘B’ items are important, ‘C’ items are marginally important.

The Pareto analysis as related to inventory control. There are three categories for the items in question. This is based on their revenue generation, turnover, or value. Typically this is done on the ABC model where an A is the best stock and C is the worse stock. Other terms for this concept are usage value analysis and ABC analysis.

A reasoning methodology that uses common facts that are accepted as true and using them to build your argument.

An abnormal or abortive end to a computer program. This system crash is usually caused by a glitch or a memory overload.

Refer to aid and abet for further explanation.

The status of real estate ownership when no clear owner is present and must be determined.

1. Human Resource Management: A natural capacity of an individual to complete the task at hand. Refer to the definition of aptitude. 2. Law: The ability to agree and act upon a legal obligation.

An individuals ability to manage their disposable income to pay a tax or loan. This is called capacity and is a deciding factor in loan decision. It is also called the five C’s of credit and fixed charge coverage ratio.

A principle in economics that those with more wealth should pay higher taxes. This balances those with a lesser income who cannot afford to pay as much.

Refer to the definition of pay principle for clarification.