Business / Finance Glossary

Carrot Equity: A loose quantity term sometimes used to describe the amount of a commodity underlying one commodity contract; e.g., 'a car of bellies.' Derived from the fact that quantities of the product s . . . View Full Definition

Carry: British slang for an equity investment with the added benefit of an opportunity to purchase more equity if the company reaches certain financial goals.

Carrying Charge: Related: Net financing cost.

Carrying Costs: The fee a broker charges for carrying securities on credit, such as on a margin account.

Carrying Value: Costs that increase with increases in the level of investment in current assets.

Cartel: Book value.

Cash: A group of businesses or nations that act together as a single producer to obtain market control and to influence prices in their favor by limiting production of a product. The United States . . . View Full Definition

Cash and Carry: The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and banker's acc . . . View Full Definition

Cash and Equivalents: Applies to derivative products. Combination of a long position in a stock/index/commodity and short position in the underlying futures, which entails a cost of carry on the long position.

Cash Asset Ratio: The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and Banker's Acc . . . View Full Definition

Cash Basis: Cash and marketable securities divided by current liabilities. See: Liquidity ratios.

Cash Budget: Refers to the accounting method that recognizes revenues and expenses when cash is actually received or paid out.

Cash Commodity: A forecasted summary of a firm's expected cash inflows and cash outflows as well as its expected cash and loan balances.

Cash Conversion Cycle: The actual physical commodity, as distinguished from a futures contract.

Cash Cow: The length of time between a firm's purchase of inventory and the receipt of cash from accounts receivable.

Cash Cycle: A company that pays out most of its earnings per share to stockholders as dividends. Or, a company or division of a company that generates a steady and significant amount of free cash flow.

Cash Deficiency Agreement: In general, the time between cash disbursement and cash collection. In net working capital management, it can be thought of as the operating cycle less the accounts payable payment period.

Cash Delivery: An agreement to invest cash in a project to the extent required to cover any cash deficiency the project may experience.

Cash Discount: The provision of some futures contracts that requires not delivery of underlying assets but settlement according to the cash value of the asset.

Cash Dividend: An incentive offered to purchasers of a firm's product for payment within a specified time period, such as ten days.

Cash Earnings: A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capit . . . View Full Definition

Cash Flow: A firm's cash revenues less cash expenses, which excludes the costs of depreciation.

Cash Flow After Interest And Taxes: In investments, cash flow represents earnings before depreciation, amortization, and non-cash charges. Sometimes called cash earnings. Cash flow from operations (called funds from operations . . . View Full Definition

Cash Flow Break-Even Point: Net income plus depreciation.

Cash Flow Coverage Ratio: The point below which the firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs.

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