financial terms glossary 3

Financial Glossary: Business Terms, Definitions & Concepts Hub

Key Rate DurationKey rate duration is a measure of a bond’s sensitivity to changes in interest rates at specific maturity points along the yield curve. Key Investor Information Document (KIID)A concise document providing essential information about an investment fund, including objectives, risks, charges, and past performance. Key Person InsuranceA life insurance policy taken out by a business on a vital employee, providing financial protection against their loss. Junk BondA high-yield, high-risk bond with a lower credit rating, offering higher returns to compensate for increased default risk.

Installment Account

Charges used to cover services provided for the day-to-day operations of the plan, such as recordkeeping, accounting, customer service support and daily valuation. A composite index that measures the performance of more than 5,000 U.S. and non-U.S. Each of the Nationwide Target Destination Funds has an individual Morningstar index to go with it that matches the year number in the fund name. The Nationwide Destination 2010 Fund uses the Morningstar® (Mstar) Lifetime Moderate 2010 Index.

Balanced fund

This strategy also has the opportunity to maximize investment returns. Direct Consolidation Loan — A type of loan that allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Deferment — An action that allows you to temporarily pause or reduce the amount of your federal student loan payments for a specified period. Borrowers are not responsible for paying the interest that accrues during this time. Credit — The trust which allows one person (or company) to lend money (or goods or services) to another person, financial terms glossary where the second person repays the debt at a later date.

Credit Rating — An estimate of the amount of credit that can be extended to an individual or business without undue risk to the lenders. Chapter 11 — A form of bankruptcy that allows a company to remain in business while its owners attempt to pay its debts. Bankruptcy — The inability of a person or organization to pay their outstanding debts.

Risk

Index-Linked BondA bond where interest payments and principal are adjusted in line with inflation, protecting investors from the eroding effects of rising prices. Interest Rate RiskThe potential for investment losses due to fluctuations in interest rates, particularly affecting fixed-income securities. Individual Savings Account (ISA)A tax-efficient savings or investment account available to UK residents, allowing tax-free income and capital gains. Hybrid Investment A financial product combining characteristics of equities and fixed-income securities, offering both growth and income potential. General Investment Account (GIA) A flexible, non-tax-advantaged investment account allowing individuals to invest in a range of assets without contribution limits.

Value fund

• Income and capital gains or losses are included in calculating the investment return.
• Junk BondA high-yield, high-risk bond with a lower credit rating, offering higher returns to compensate for increased default risk.
• In a sale-leaseback transaction, the seller of the asset becomes the lessee and the purchaser becomes the lessor.
• Interest rate futures contract on a notional long-term Italian government bond (Buoni del Tesoro Poliennali or BTP) with a remaining term comprised between 8.5 and 11 years and a 6% coupon.
• Borrowers should verify with a state or federal regulator that a lender is licensed before signing a contract.

Usually, but not always, finance does this annually for the upcoming year. With these terms tucked into your FP&A toolkit, you’re well-equipped to navigate the complexities of financial planning and analysis. Remember, the goal isn’t just to crunch numbers but to weave them into a narrative that guides your business to new heights. So, here’s to making finance both informative and fun, one term at a time.

• Balanced Portfolio A diversified investment portfolio combining equities, bonds, and other assets to reduce risk and achieve moderate returns.
• A process where you pay an agency to negotiate directly with your creditors in the hopes of making significantly reduced settlements for your debts.
• The amount that a buyer is expected to pay, typically expressed in hourly or daily rates, for services rendered.
• Quiet PeriodA Quiet Period is a period of time, typically before an earnings report or an IPO, during which a company must refrain from making public statements.
• A non-deliverable option is an option for which the underlying asset cannot be delivered.

Delinquencies remain on your credit report for 7 years and are damaging to your credit score. The amount of money you owe in outstanding debts compared to the total amount of credit you have available though all credit cards and credit lines. This ratio measures how much of your available credit you are using.

Secured Business Loan

After a debt is charged-off, it can be sold to a collections agency. A type of bankruptcy where the consumer must pay off some of their debts over time. Chapter 13 bankruptcy filing records remain on your credit report for 7 years from the discharge date or 10 years from the filing date if it is not discharged. Each account included in the filing will remain on your report for 7 years. A type of consumer bankruptcy where your responsibility for your debts is cleared entirely.

Home Equity — The calculation of a home’s current market value minus any remaining loans or liens attached to it. Foreclosure — The legal process (usually initiated by the creditor) used to attempt to recover outstanding debt secured by collateral. The collateral (generally property) is confiscated by the creditor and sold to repay this debt.

A written agreement between a lender and borrower that provides the lender with security over the borrower’s assets. A debenture can only be used within a limited company or limited liability partnership . With so many terms and processes to master, accounting can feel complex if managed manually. But with an ERP like Odoo, everything from profit & loss, cash flow, to bank reconciliation is seamlessly connected in one platform. A measure of the number of days that it takes for a company to collect revenue after a sale is made. Wrap AccountAn all-inclusive investment platform offering consolidated reporting and management across multiple accounts and asset classes.

An additional person who signs a loan document and takes equal responsibility for the debt. A borrower may want to use a co-signer if their credit or financial situation is not good enough to qualify for a loan on their own. A co-signer is legally responsible for the loan and the shared account will appear on their credit report.

When interest rates (and bond yields) go up, bond prices usually go down, and vice versa. The shift over time in a target date fund’s asset allocation mix from a focus on growth to a focus on income. Base fees charged to a plan, regardless of the number of participants. Examples of flat rate expenses include preparation of IRS Form 5500, discrimination testing and vesting calculation. A self-regulatory organization for brokerage firms doing business in the United States.