ABC Method Concept ABC method or System (Activity Based Costing) is an accountancy technique or method, developed by Robert Kaplan and Cooper at Harvard in the mid 80s being applied in analytic accounting with the aim to guarantee a correct attribution of all costs, including the indirect costs to activities that are in its origin. […]

Accounting Liquidity Concept The expression Accounting Liquidity designates the quickness or easiness with which the assets detained by an entity can be converted in payment method. For example, the current assets (products stocks, debts own by customers, etc.) are faster converted into payment methods than the fixed or tangible assets (facilities, equipments, etc.). The bigger […]

The expression Acid Test, also known as quick ratio, is an indicator of liquidity of a very short term that seeks to evaluate the company’s capacity to cope with its short term financial compromises using only their net financial resources, this is, without the need of existences sales or debt receipts from clients and other […]

Activity or Operation Ratios Concept Activity or operation ratios form a type of economical-financial indicators that seek to measure the efficiency level in the company’s assets management. Usually activity ratios assume the form of rotation ratios (which represent the number of times that an asset transforms in sales on a certain period of time) or […]

The term AMPU (Average Margin Per Unit) is an economical indicator used in economic and financial analyses of companies and seeks to evaluate the company’s capacity to generate profits or margin per unit. Is a highly used indicator in sectors such as telecommunications and other sectors based in subscription, meaning the provided profit by each […]

The term ARPU (Average Revenue Per Unit) is an economical indicator used in company’s economical and financial analyses and seeks to evaluate the (…)

Assets Rotation Ratio Concept Assets rotation ratio or indicator is an activity ratio that seeks to measure the efficiency level with which the company is using its assets. The higher the assets rotation ratio value, bigger the efficiency with which the company is creating sales. Assets rotation ratio is calculated by the division of the […]

An option is at-the-money if your strike price equals the market price.

Average Payments Period Concept Average Payments Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its suppliers payments. The bigger the average payments term, bigger its payment terms negotiation capacity but can also mean difficulties in the fulfillment of the agreed terms. Average payments period is […]

Average Receipts Period Concept Average Receipts Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its clients credit. The bigger the average receipts term, lower is the credit policy efficiency. Average receipt period is calculated by the division of the average amount of clients credit by […]

Average Stocks Period Concept Average Stocks Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its stock inventories. The bigger the average stocks period, lower is the stocks management efficiency. Average stocks period is calculated by the division of the average amount of stocks by the […]

Defensive assets mean assets for which the effects of inflation and currency devaluation are minimized. This term refers, in particular, to real assets such as real estate and precious metals such as gold.

Financial Autonomy Concept Financial autonomy indicates the part of the company’s total applications, namely goods and investment applications, financial applications, stocks applications, credit granted to clients, etc., which was supported by capitals owned by the company self, this is, the called equity. This concept is extremely useful on the long term financial risk evaluation since […]

Financial Leverage Concept: Financial Leverage corresponds to a financial growth effect of Profitability of Equity Capitals (also designated as…

A financial asset means any asset that is money, equity instrument of another entity or a contractual right to receive cash.

Monetary aggregates can be defined as the currency measures used in the monetary policy.

Toxic asset is an expression that popularized certain financial products following the financial crisis started with the subprime in the USA.

An underwriting contract is an agreement that establishes the conditions for all securities offered in a given public offer to have a buyer before starting.