Banking & Finance

What is collateral?

Collateral is personal or real property that is pledged or title to which has been assigned to secure the satisfaction of an obligation.  Although the use of assets to secure lendi...


What is collateral analysis?

Collateral analysis is the analysis of the ability of collateral to support a loan and the collateral proceeds to satisfy any remaining loan obligations.  Credit analysis incorpora...


What is cash flow statement analysis?

Cash flow statement analysis is used to determine the flow of cash into and out of a company and its ability to generate cash and cash equivalents, the timing and certainty of thei...


What is cash and cash equivalents?

Cash, which is the most liquid asset, includes all cash on hand (i.e., coins, bank notes, personal checks, bank drafts and cashier’s checks) and all of the firm’s cash on demand de...


What is capital stock?

A company’s authorized capital stock is the maximum number of shares of each class of capital stock that a company is legally permitted to issue, as authorized by the appropriate a...


What is big-ticket leasing?

Big-ticket leasing involves the lease financing of low-volume, high-value assets, such as aircraft, ships, telecommunications equipment and large industrial plants, arranged under...


What is bankruptcy?

Bankruptcy is a nontechnical term for a legal state of insolvency.  Any action that makes an individual or entity liable to be proceeded against involuntarily as a bankrupt or for...


What is balance sheet analysis?

Balance sheet analysis is the evaluation of the structure of a company’s balance sheet and the nature and value of its assets, liabilities and equity, typically over two or more ac...


What is automated underwriting?

Advances in computer technology and increasing information about credit risk have improved credit modelling techniques and led to automated underwriting and credit-scoring systems....


What is asset impairment and an impairment loss?

An impairment is a permanent reduction in the carrying value of an asset below its fair value (US GAAP) or recoverable amount (IFRS), which occurs when it is deemed improbable that...


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