Accretion Of Discount

Accretion of discount is the increase in the value of a discounted instrument as time passes and the maturity date looms closer. The value of the instrument will accrete (grow) at the interest rate implied by the discounted issuance price, the value at maturity, and the term to maturity.

Depreciated Cost

Depreciated Cost refers to the remaining value of a fixed asset after accounting for depreciation due to wear and tear, aging, or technological obsolescence. Depreciated cost is determined by subtracting the accumulated depreciation from the original cost of the asset. It represents the current book value of the asset during the accounting period, rather than its original purchase cost.

Discount Margin

Discount Margin refers to the difference between the yield of a floating-rate bond and a benchmark interest rate (such as Libor or Treasury yield). Specifically, the discount margin is the additional yield that investors expect to receive over the benchmark rate while holding a floating-rate bond. This margin is typically determined by calculating the difference between the present value of the bond and the discounted value of its future cash flows. The discount margin helps investors assess the attractiveness and risk level of floating-rate bonds.

Hiring Freeze

A hiring freeze is when an employer stops hiring workers, usually temporarily, in an effort to contain costs. Such cost-cutting may be the result of financial distress, but even large, successful companies may opt to pause hiring amid an economic slowdown, recession or instances of overcapacity.

Book Value

For value investors, book value is the sum of the amounts of all the line items in the shareholders' equity section on a company's balance sheet. You can also calculate book value by subtracting a business's total liabilities from its total assets.There is also a book value used by accountants to valuate assets owned by a company. This differs from book value for investors because it is used internally for managerial accounting purposes.

Folio Number

In mutual funds, a folio number is a unique number identifying your account with the fund. Like a bank account number, the folio number can be used as a way to uniquely identify fund investors. A folio number also records items such as how much money each investor has placed with the fund, their transaction history, and contact details.

Account Statement

An account statement is a periodic summary of account activity with a beginning date and an ending date. The most commonly known are checking account statements, usually provided monthly, and brokerage account statements, which are provided monthly or quarterly. Monthly credit card bills are also considered account statements.

Billing Cycle

A billing cycle is the interval of time from the end of one billing statement date to the next billing statement date for goods or services a company provides to another company or consumer on a recurring basis. Although billing cycles are most often set on a monthly basis, they can vary in length depending on the type of product or service rendered.

Long-Term Assets

Long-term assets are assets, whether tangible or non-tangible, that will benefit the company for more that one year. Also known as non-current assets, long-term assets can include fixed assets such as a company's property, plant, and equipment, but can also include other assets such as long term investments, patents, copyright, franchises, goodwill, trademarks, and trade names, as well as software. Long-term assets can be contrasted with current assets, which can be conveniently sold, consumed, used, or exhausted through standard business operations with one year.

Long-Term Debt

Long-term debt is debt that matures in more than one year. Long-term debt can be viewed from two perspectives: financial statement reporting by the issuer and financial investing. In financial statement reporting, companies must record long-term debt issuance and all of its associated payment obligations on its financial statements. On the flip side, investing in long-term debt includes putting money into debt investments with maturities of more than one year.

Evergreen Contract

Evergreen Contract refers to a contract that automatically renews itself without a specified end date. Unless one party provides notice of termination within the period stipulated in the contract, the contract remains in effect and renews automatically. These types of contracts are often used in service agreements, lease agreements, or long-term supply agreements, helping to simplify contract management and avoid service interruptions after the contract's expiration.

Long-Term Liabilities

Long-term liabilities are a company's financial obligations that are due more than one year in the future. The current portion of long-term debt is listed separately on the balance sheet to provide a more accurate view of a company's current liquidity and the company’s ability to pay current liabilities as they become due.

War Bond

War Bond refers to bonds issued by a government during wartime to raise funds for the war effort. These bonds are typically sold to the general public to encourage citizens to invest and support the nation's war efforts. War bonds usually have lower interest rates and may come with patriotic messaging to inspire citizens to purchase them.

War Economy

War Economy refers to a set of economic policies and measures adopted by a nation during wartime to support the demands of the war and maintain national economic stability. A war economy typically includes the reallocation of resources, militarization of production, control of prices and wages, and rationing of certain goods and services. The government may increase its control over the economy, prioritize the production of military supplies, restrict civilian consumption, and even requisition private property. The goal of a war economy is to ensure an adequate supply of resources and materials to support military operations and safeguard national defense.

Debt Restructuring

Debt Restructuring refers to the process of renegotiating the terms of debt between a borrower and creditors to enable the borrower to better fulfill their debt obligations. Methods of restructuring may include extending the repayment period, lowering interest rates, reducing the principal amount, or converting debt into equity. The goal of debt restructuring is to help the borrower regain financial stability while allowing creditors to recover as much of the owed amount as possible.

Debt Security

Debt Security is a financial instrument that represents a debt owed by the issuer to the holder. Debt securities typically include bonds, notes, and debentures. The holder provides funds to the issuer, and in return, the issuer promises to pay interest at specified intervals and to repay the principal at maturity. Debt securities are characterized by a fixed rate of return and lower risk, making them suitable for investors seeking stable income. Debt securities are widely used by governments, corporations, and other entities to raise capital.

Debt Financing

Debt Financing refers to the method by which a business or individual raises funds through borrowing. This form of financing typically includes issuing bonds, taking out loans, or other forms of borrowing. Through debt financing, the borrower commits to repaying the principal and interest at specified future dates. The advantage of debt financing is that the borrower can obtain funds without diluting existing shareholders' equity, but the downside is the increased financial burden and repayment pressure. Debt financing is widely used for business expansion, project investment, and operational funding needs.

Debt Overhang

Debt overhang refers to a debt burden so large that an entity cannot take on additional debt to finance future projects. This includes entities that are profitable enough to be able to reduce indebtedness over time. A debt overhang serves to dissuade current investment, since all earnings from new projects would only go to existing debt holders, leaving little incentive and ability for the entity to attempt to dig itself out of the hole.

Debt Instrument

A debt instrument is any financial tool used to raise capital. It is a documented, binding obligation between two parties in which one party lends funds to another, with the repayment method specified in a contract. Some are secured by collateral, and most involve interest, a schedule for payments, and time frame to maturity if it has a maturity date.

Debt Issue

Debt Issue refers to the process by which a business, government, or other entity raises funds by issuing debt securities, such as bonds, notes, or debentures. In a debt issue, the issuer sells debt securities to investors and promises to pay interest and repay the principal at specified future dates. Debt issuance is a common method of financing, suitable for projects or operational needs that require substantial amounts of capital. Through debt issuance, the issuer can obtain the necessary funds, while investors can receive relatively stable returns.

Debt Service

Debt Service refers to the process by which a borrower repays the principal and interest of a debt according to the agreed schedule and amounts. Debt service includes regular interest payments and the repayment of the principal at maturity. For both businesses and individuals, the ability to service debt is a crucial indicator of financial health. Failure to meet debt service obligations on time can lead to default, a downgrade in credit rating, and even bankruptcy. Therefore, effectively managing debt service is essential for maintaining good financial standing.