Finance

Accepting Risk

Accepting Risk

Accepting risk, or risk acceptance is a concept in which a person or organization identifies risk and makes it appropriate, making no attempt to minimize or mitigate it. Often known as “risk retention,” it is a risk management aspect generally found in the fields of business or investment. Th.....

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Certificate Of Deposit

Certificate Of Deposit

A deposit certificate (CD) is a time deposit; it refers to a financial product offered by financial institutions such as banks and credit unions, which allows borrowers to receive a certain amount of interest on their deposits and in exchange, must keep the deposit unused for a certain period of .....

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Advantages And Disadvantages of Demand Deposit

Advantages And Disadvantages of Demand Deposit

A demand deposit (or non-confidential money) is a bank account that allows the depositor to withdraw funds without warning to the bank on request. In order to pay for regular expenditures, the depositor may usually use demand deposit funds. The bank or financial institution will pay either a low .....

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Demand Deposit

Demand Deposit

Demand deposits or non-confidential funds consist of funds kept in a bank account from which deposited funds, such as checking accounts, can be withdrawn at any time. Usually, these account balances are called capital and constitute the main part of a country’s narrowly defined money supply.....

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Demand Draft

Demand Draft

A demand draft is a method used by a person to make a transfer payment from one bank account to another, also known as a remotely created check (RCC). In order to direct another bank or another branch of the same bank (drawee) to pay the stated sum of money to the payee, it is […]

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Detection Risk (DR)

Detection Risk (DR)

Detection risk (DR) is simply the risk that material errors in the financial statements will not be identified by the procedures applied by the auditors. Such errors may be due to either fraud or mistake. To identify these misstatements, auditors make use of audit procedures. This is especially p.....

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Audit Risk

Audit Risk

Audit risk is the risk of an inappropriate audit opinion on financial statements being expressed by the auditors. Auditors are at risk of offering an unqualified or clean opinion on financial statements involving a substantive error. The aim of the audit is through adequate testing and sufficient.....

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Advertising To Sales Ratio

Advertising To Sales Ratio

The advertising-to-sales ratio, also known as the “A to S,” is a measure of the performance of the advertising campaign of a company. The advertisement to sales ratio is used to assess how helpful the resources of the business and advertising expenditures are in producing fresh sales. In gene.....

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Free Cash Flow (FCF)

Free Cash Flow (FCF)

Free cash flow (FCF), also known as a free cash flow to firm (FCFF), reflects the cash created by a company to finance operations and retain its capital assets after accounting for cash outflows. In other words, once all the company’s expenses have been paid for it calculates how much surpl.....

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Price-To-Cash Flow Ratio

Price-To-Cash Flow Ratio

The price-to-cash flow ratio (also known as the price/cash flow ratio or P/CF) is an indicator of stock valuation or a multiple that calculates the value of the price of a stock compared to its per-share operating cash flow. It is determined by dividing the market value of the company by the oper.....

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Cash Flow To Debt Ratio

Cash Flow To Debt Ratio

The cash flow to debt ratio is a coverage ratio which compares the cash flow generated by a company to its total debt. Simply stated, using its cash flow alone this metric is also used to calculate the amount of time needed for a business to pay off its debt. Cash flow from operations is [&hellip.....

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Excess Cash Flow

Excess Cash Flow

Excess cash flow is a concept used in lending agreements or indentures of bonds which applies to the part of a company’s cash flows that must be returned to a lender. That is to say that as a result of its business operations, the excess cash flow is unencumbered money accruing to the compa.....

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