The business
activity concerned with determining a firm's long&-term
investments, obtaining the funds to pay for those investments,
and conducting the firm's everyday financial activities.
The manager
responsible for planning and controlling the acquisition and
dispersal of a company's financial assets.
The pattern in
which cash flows into and out of a company.
A business
plan for attaining a specific financial position.
Materials and
goods that are held by a company but will be sold within one
year.
The supplies
purchased by a firm for use in its production process.
The portion of
a firm's inventory consisting of goods part&-way through
the production process.
The portion of
a firm inventory consisting of completed goods ready for sale.
The granting
of credit by one firm to another.
A form of
trade credit in which sellers ship merchandise on faith that
payment from the buyer will be forthcoming.
A form of
trade credit in which a buyer signs a promise&-to&-pay
agreement before the merchandise is shipped.
A form of
trade credit in which the seller draws up a statement of payment
terms and attaches it to the merchandise. The buyer must sign
this agreement to take possession of the merchandise.
A trade draft
that has been signed by the buyer.
A loan in
which the borrower is required to put up collateral.
An asset
pledged by a borrower; in the event of nonpayment of the loan,
the lender has the right to seize the asset.
Using accounts
receivable as collateral for a loan.
A loan in
which the borrower is not required to put up collateral.
A standing
agreement between a bank and a him in which the bank promises to
lend the firm a maximum amount of funds on request. The bank
will not necessarily have the funds to lend when they are
needed, however.
An agreement
in which a lender agrees to make some amount of funds available
on demand to a firm. The lender guarantees that funds will be
available when sought by the borrower.
A method of
short&-run financing in which large, stable companies issue
unsecured notes at a certain face value, sell them for less than
the face value, then buy them back at the face value at a later
date.
Selling a
firm's accounts receivable to another company.
Long&-term
borrowing financed from sources outside the company.
The interest
rate available to a bank's best (most credit worthy) customers.
A bond issued
by a business in which the issuing company pays the holder a
certain amount of money on a certain date, with stated interest
payments in the interim.
The date on
which the principal of a bond is paid off.
The contract
spelling out all the terms of the bond, including the principal
amount, the interest rate, and the maturity date.
The way in
which a bond is paid off.
The use of
common stock and/or retained earnings to raise money for long&-term
expenditures; involves putting the owners' capital to work.
The use of
borrowed funds to finance an investment.
A bond that
qualifies for one of the top four ratings by the Standard
Poor's or the Moody's rating service.
Bonds that are
below investment grade because of their unusually high default
risks.
