An amount of receivables loss that was determined to be uncollectable from a customer becomes collected at a later date.

The process of writing premiums for insurance . - see Underwriter

The difference between the average rate a bank receives from its earning assets and the average rate it pays for deposits and borrowed funds.

Loans or other assets whose income is recognized when cash is actually collected. In some situations, cash receipts from these assets are credited directly to principal.

Marketable securities for funds deposited in a bank at interest for a specified period of time. This is usually between 30 to 90 days and sold in denominations of $100,000.

The degree to which an asset is subject to fluctuations in interest rates. The term is typically used with respect to interest-earning assets or interest-bearing liabilities whose interest rates are adjustable within a short period of time (less than one year), according to maturity or contractual terms. Rate adjustments usually reflect changes in prevailing short term money rates.

A short hand term for Capital Expenditures. See Capital Expenditures

Leverage is the process of using debt obligations to finance a business firm.

Operating Leverage is the process of using fixed operating costs to magnify the effects of sales on earnings. When a firms earnings are growing faster than sales then a firm has operating leverage.

Financial Leverage is the process of using fixed financial costs to magnify the effects of earnings on earnings per share . When a firms earnings are growing faster than sales then a firm has operating leverage.

Total Leverage is the combination of both operating and financial leverage. See Operating Leverage. See also Financial Leverage

A Leverage Recapitalization occurs when a firm wishes to use debt in exchange for equity to capitalize a business firm.

see Leverage

see Derivative Contract

The main currency of major European economies.

see Economic Value Added

The main currency of European economies shared by France, Germany, Italy , and others. The Euro is designed to add stability to financial markets in Europe.

Cash flow that is not earmarked for a specific capital expenditure project at a company.

see Modified Accelerated Cost Recovery System

A financial accounting method in which revenues and expenses are recognized at the point of sale and expenses when they are incurred.

Obligations by a business firm for services received for which payment has not been made. Accrued expenses are sometimes used to finance a business firm.

see Accelerated Cost Recovery System

Net Debt consists of short and long term interest bearing debt less cash and marketable securities.

A Leverage Recapitalization occurs when a company incurs significant additional debt with the purpose of either paying a large dividend or repurchasing shares. This results in a highly leveraged enterprise.

Cash flow from core operations less capital expenditures and dividends.

Return on Capital is a measure of economic performance. This ratio is used to measure how much capital (I.e. debt and equity) was used to produce a firm's earnings.

A Collateralized Bond Obligation (CBO) is an investment grade bond backed by a pool of junk bonds. Junk Bonds are not investment grade because they pool several types of credit quality bonds together.

A type of mortgage backed security that creates separate pools of pass -through rates at different classes of bond holders with varying maturities, called tranches. The repayments from the pool of pass through securities are used to retire the bonds in the order specified by the bonds prospectus.

A pattern of equal annual cash flows.

Collateralized debt Obligations (CDO) are financial vehicles that bundle different kinds of debt such as corporate bonds, mortgage -backed securities, and debt backed by money owed on credit cards which are separated and sold to investors in the form of bonds. These bonds can differ depending on the terms of which can pay higher interest and those which are least risky.

CDO's help investors offset risk by spreading securities to a greater number of holders. Higher risk debt can be matched with higher grade debt and packaged together to receive investment grade credit ratings which makes the security more attractive to sell to investors.

Cod's can be risky since the underlying asset cannot easily be determined which make them difficult to price and trade. Combining securities with varying degrees of risk exposes investors to potential heavy losses.

CDO's are widely held by pension funds, insurance companies, banks, and hedge funds.

The current worth of bond, which can be estimated by calculating the present value of all the cash inflows associated with the bond.

The process of using physical resources or contracts to mitigate financial exposure and risk. Electric utilities may hedge commitments to deliver gas through storage, bilateral contracts, or derivative instruments.

The actual payment or receipt of dollars by a firm.

Refers to specific items put up by a borrower to secure a loan.

The combination of debt and equity used by a business to finance its operations.