公司理财词汇表.docVIP

COPORATE FINANCE Glossary AAR Average accounting return. ACRS Accelerated cost recovery system. APT Arbitrage pricing theory. Absolute priority rule (APR) Establishes priority of claims under liquidation. Accelerated cost recovery system (ACRS) A system used to depreciate assets for tax purposes. The current system, enacted by the 1986 Tax Reform Act, is very similar to the ACRS established in 1981. The current system specifies the depreciable lives (recovery periods) and rates for each of several classes of property. Accounting insolvency Total liabilities exceed total assets. A firm with negative net worth is insolvent on the books. Accounting liquidity The ease and quickness with which assets can be converted to cash. Accounts payable Money the firm owes to suppliers. Accounts receivable Money owed to the firm by customers. Accounts receivable financing A secured short-term loan that involves either the assigning of receivables or the factoring of receivables. Under assignment, the lender has a lien on the receivables and recourse to the borrower. Factoring involves the sale of accounts receivable. Then the purchaser, called the factor, must collect on the receivables. Accounts receivable turnover Credit sales divided by average accounts receivable. Additions to net working capital Component of cash flow of firm, along with operating cash flow and capital spending. Advance commitment A promise to sell an asset before the seller has lined up purchase of the asset. This seller can offset risk by purchasing a futures contract to fix the sales price. Agency costs Costs of conflicts of interest among stockholders, bondholders, and managers. Agency costs are the costs of resolving these conflicts. They include the costs of providing managers with an incentive to maximize shareholder wealth and then monitoring their behavior, and the cost of protecting bondholders from shareholders. Agency costs are borne by stockholders. Agency theory The theory of the relationship bet