Loan definition
Accounting Tools
APRIL 22, 2025
A demand loan is a type of loan that the lender can require to be repaid at any time, without prior notice.
Rights offering definition
Accounting Tools
JANUARY 26, 2025
Related AccountingTools Courses Corporate Finance Treasurers Guidebook Related Articles Preemptive Right Stock Subscription Accounting Subscribed Stock This situation arises when a lender demands that a business obtain more equity before it will consent to the issuance of any additional debt.
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Interim dividend definition
Accounting Tools
APRIL 21, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is an Interim Dividend? An interim dividend is a distribution to shareholders that has been both declared and paid before a company has determined its full-year earnings.
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Data Talks, CFOs Listen: Why Analytics Are Key To Better Spend Management
Doing More With Less: The Modern Finance Miracle
The Hidden Science Behind Why Finance Teams Resist Change—And How to Fix It
Protect What Matters: Rethinking Finance Ops In A Digital World
Your Accounting Expertise Will Only Get You So Far: What Really Matters
Beneficial owner definition
Accounting Tools
JULY 16, 2023
Related Courses Corporate Finance Investor Relations Guidebook Public Company Accounting and Finance What is a Beneficial Owner? A beneficial owner is an entity that owns stock or other property that is registered in the name of another party. The beneficial owner enjoys the income from the owned asset.
Equity capital definition
Accounting Tools
JULY 14, 2024
In some cases, this may be a negative figure, since the market value of company assets may be lower than the aggregate amount of liabilities.
Rule of 69 definition
Accounting Tools
APRIL 18, 2023
Related Courses Corporate Finance Essentials of Business Math Financial Analysis What is the Rule of 69? The Rule of 69 is used to estimate the amount of time it will take for an investment to double, assuming continuously compounded interest. The calculation is to divide 69 by the rate of return for an investment and then add 0.35
Called up share capital definition
Accounting Tools
JULY 14, 2024
Related AccountingTools Courses Corporate Finance Treasurer's Guidebook Smith initially pays $5 per share, since he is short on cash at the moment. The agreement states that he will pay off the remainder of the amount owed as soon as he liquidates another investment.
Intercompany loan definition
Accounting Tools
AUGUST 9, 2024
Related AccountingTools Courses Business Combinations and Consolidations Corporate Cash Management Corporate Finance When an intercompany loan is created, it should be fully documented, including the amount of the interest rate to be charged and principal repayment terms.
Self-liquidating loan definition
Accounting Tools
MAY 2, 2024
Related AccountingTools Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook Related Articles Demand Loan Evergreen Loan Secured Loan Term Loan Working Capital Loan
Loan stock definition
Accounting Tools
NOVEMBER 5, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Loan Stock? Loan stock is shares in a business that have been pledged as collateral for a loan.
Common stock definition
Accounting Tools
JANUARY 22, 2024
Related AccountingTools Courses Accountants' Guidebook Corporate Finance Related Articles Common Stock Account Common Stock Equivalent Premium on Common Stock The Difference Between Preferred Stock and Common Stock
The Rule of 72 definition
Accounting Tools
JULY 16, 2024
years) Related AccountingTools Courses Corporate Finance Essentials of Business Math Financial Analysis The Rule of 72 is fairly accurate for low rates of return, and becomes increasingly inaccurate when higher rates of return are incorporated into the calculation. 72 ÷ 1 = 72.0 years) 2% interest rate. (72 72 ÷ 2 = 36.0 72 ÷ 3 = 24.0
Original issue discount definition
Accounting Tools
MARCH 24, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is an Original Issue Discount? An original issue discount is the difference between the face value of a bond and the price at which it was originally sold to an investor by the issuer.
Invoice discounting definition
Accounting Tools
APRIL 4, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Invoice Discounting? Invoice discounting is the practice of using a company's unpaid accounts receivable as collateral for a loan , which is issued by a finance company.
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75 Dividends definition
Accounting Tools
JULY 10, 2023
Related Courses CFO Guidebook Corporate Finance Treasurer's Guidebook What are Dividends? Dividends are a portion of a company's earnings which it returns to investors , usually as a cash payment.
Opportunity cost of capital definition
Accounting Tools
NOVEMBER 2, 2023
Related Courses Capital Budgeting Corporate Finance Financial Analysis What is the Opportunity Cost of Capital? The opportunity cost of capital is the incremental return on investment that a business foregoes when it elects to use funds for an internal project, rather than investing cash in a marketable security.
Private equity definition
Accounting Tools
APRIL 3, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Private Equity? Private equity is an investment in a business that is not listed on a stock exchange. The private equity business has the potential to be extraordinarily profitable, and so attracts some of the best business talent.
Bill of exchange definition
Accounting Tools
MARCH 30, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Bill of Exchange? A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as of a predetermined date or on demand. Bills of exchange are primarily used in international trade.
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Financial leverage definition
Accounting Tools
JUNE 7, 2023
Related Courses Corporate Finance The Interpretation of Financial Statements Treasurer's Guidebook What is Financial Leverage? Financial leverage is the use of debt to buy more assets. Leverage is employed to increase the return on equity.
Private placement definition
Accounting Tools
SEPTEMBER 2, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Private Placement? A private placement is the sale of a security to a small number of investors.
No par value stock definition
Accounting Tools
JULY 28, 2023
Related Courses Corporate Finance The Balance Sheet What is No Par Value Stock? No par value stock is shares that have been issued without a par value listed on the face of the stock certificate. Historically, par value used to be the price at which a company initially sold its shares.
Simple rate of return definition
Accounting Tools
JUNE 12, 2023
Related Courses Capital Budgeting Corporate Finance Treasurer's Guidebook What is the Simple Rate of Return? The simple rate of return is the incremental amount of net income expected from a prospective investment opportunity, divided by the investment in it.
Payout ratio definition
Accounting Tools
SEPTEMBER 26, 2023
Related Courses Corporate Finance Investor Relations Guidebook Public Company Accounting and Finance What is the Payout Ratio? The payout ratio is the proportion of dividends that a company pays to investors in relation to its reported net income. It is expressed as a percentage of the firm’s reported earnings.
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75 Capital stock definition
Accounting Tools
MARCH 19, 2024
Capital stock is comprised of all types of shares issued by a corporation. An alternative definition of capital stock is that it is comprised of the total number of common shares and preferred shares that are authorized for issuance. What is Capital Stock?
Financial gearing definition
Accounting Tools
JULY 11, 2024
The company would most definitely be considered highly geared. How to Calculate Financial Gearing The calculation used for financial gearing is to add together all forms of debt and then divide by the total amount of equity. The company currently has $2,000,000 of equity, so there is now a 5x ratio of debt to equity.
Proration definition
Accounting Tools
JUNE 3, 2024
Related AccountingTools Courses Cost Accounting Fundamentals Corporate Finance Proration in Tender Offers Proration can refer to the allocation of cash or shares to shareholders resulting from a tender offer when there is not sufficient cash or stock to fulfill all offers.
Principal definition
Accounting Tools
OCTOBER 4, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Principal? Principal is the amount of a debt that was originally borrowed, and which remains unpaid. This amount does not include any accumulated unpaid interest associated with the debt.
Lend definition
Accounting Tools
NOVEMBER 9, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Lend? To lend is the act of giving an asset to a third party, under the expectation that the asset will be returned at a later date.
Security definition
Accounting Tools
SEPTEMBER 3, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is a Security? A security is a financial instrument issued by a business entity or government, which gives the buyer the right to either interest payments or a share of the earnings of the issuer. Securities form a key part of the financial structure of an economy.
Collateralization definition
Accounting Tools
APRIL 25, 2023
Related Courses CFO Guidebook Corporate Finance Treasurer's Guidebook What is Collateralization? Collateralization occurs when a borrower pledges an asset in order to obtain a loan. A lender requires collateral when the borrower does not have a sufficient lending history or cash flows to give assurance that it can repay a loan.
Secondary distribution definition
Accounting Tools
OCTOBER 13, 2023
Related Courses Corporate Finance Public Company Accounting and Finance A secondary distribution is the sale of a large number of shares by one or more large investors. The sale is handled by a securities firm and so is not conducted through a stock exchange.
Dilutive definition
Accounting Tools
AUGUST 31, 2023
Related Courses Accounting for Earnings per Share Corporate Finance What is Dilutive? Dilutive is the effect of a transaction that reduces earnings per share or the ownership interest of an investor. This concept occurs when a business issues shares , convertible debt , options , or warrants.
Collateral definition
Accounting Tools
AUGUST 29, 2023
Related Courses CFO Guidebook Corporate Finance Treasurer's Guidebook What is Collateral? Collateral is an asset or group of assets that a borrower or guarantor has pledged as security for a loan. The lender has the legal right to seize and sell the asset(s) if the borrower is unable to pay back the loan by the agreed date.
Lender definition
Accounting Tools
MARCH 28, 2024
Related AccountingTools Courses Corporate Finance Treasurer's Guidebook Related Article Lender Relations (podcast) For example, a lender may specialize in mortgages to individuals, or lines of credit to businesses.
Holding period definition
Accounting Tools
AUGUST 25, 2023
Related Courses Corporate Finance GAAP Guidebook What is a Holding Period? A holding period is the duration of an investment by an investor. It begins with the purchase date by the investor and ends with the sale date.
Maturity value definition
Accounting Tools
OCTOBER 21, 2024
Related AccountingTools Course Corporate Finance The maturity value increases when the interest on the investment compounds at a rapid rate (such as monthly or quarterly), since interest is being calculated on a continually growing base. Fees and taxes.
Holder of record definition
Accounting Tools
AUGUST 25, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is a Holder of Record? The concept is of most importance when determining who should receive dividend or interest payments as of the date when they are to be distributed, as well as the ability to vote in corporate elections.
Finance charge definition
Accounting Tools
OCTOBER 22, 2024
Related AccountingTools Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook Related Articles How to Calculate Interest Expense How to Calculate the Effective Interest Rate This is done in order to minimize the cases in which borrowers are charged excessive rates for loaned funds.
Equities definition
Accounting Tools
JULY 30, 2023
Related Courses Corporate Cash Management Corporate Finance Investing Guidebook What are Equities? Equities are financial instruments that give their holders an ownership position in a corporation. Examples of equities are common stock and preferred stock.
Ex-rights definition
Accounting Tools
SEPTEMBER 25, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Ex-Rights? Ex-rights refers to a share of stock that is selling without any associated rights to buy additional shares being offered by the issuer.
Classified stock definition
Accounting Tools
APRIL 24, 2023
Related Courses Corporate Finance How to Audit Equity What is Classified Stock? The charter and bylaws of a corporation contain the specific privileges accorded to each type of stock. Classified stock is a type of common stock that has special privileges, such as enhanced voting rights or dividend rights.
Reverse leverage definition
Accounting Tools
FEBRUARY 12, 2024
Related AccountingTools Courses Corporate Finance Financial Analysis The Interpretation of Financial Statements Related Article Leverage Ratios After one year, he finds that the actual net after-tax return on his purchase of the manufacturing company is just 3%.
Holding loss definition
Accounting Tools
AUGUST 25, 2023
Related Courses Corporate Finance GAAP Guidebook What is a Holding Loss? A holding loss is a reduction in the value of an asset that continues to be owned. Depending on the circumstances, a holding loss may be recognized by the holder of the asset.
Nominal value definition
Accounting Tools
JULY 9, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Nominal Value? Nominal value is the face value of a security. This amount is printed on the front of the security certificate. For example, the nominal value of a share of common stock with a par value of $0.01
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