Search results
Results from the WOW.Com Content Network
The formal accounting distinction between on- and off-balance-sheet items can be quite detailed and will depend to some degree on management judgments, but in general terms, an item should appear on the company's balance sheet if it is an asset or liability that the company owns or is legally responsible for; uncertain assets or liabilities ...
The price-to-book ratio (P/B) is a commonly used benchmark comparing market value to the accounting book value of the firm's assets. The price/sales ratio and EV/sales ratios measure value relative to sales. These multiples must be used with caution as both sales and book values are less likely to be value drivers than earnings.
Basel I categorized assets into five risk buckets, and mandated minimum capital requirements for each. This limits accounting leverage. If a bank is required to hold 8% capital against an asset, that is the same as an accounting leverage limit of 1/.08 or 12.5 to 1. [7]
Alpha's maximum leverage was five times. Beta's leverage was up to 10 times, depending upon the quality of its asset portfolio. Subsequent SIVs, such as Centauri and Dorada, raised the leverage to around 20 times. Typically banks are leveraged between 25 and 50 times, so most SIVs operated with leverage of approx half that of traditional banks.
Leverage is defined as the ratio of the asset value to the cash needed to purchase it. The leverage cycle can be defined as the procyclical expansion and contraction of leverage over the course of the business cycle. The existence of procyclical leverage amplifies the effect on asset prices over the business cycle.
These entries, referred to as postings, become part of a book of final entry or ledger. Examples of common financial accounts are sales, accounts [1] receivable, mortgages, loans, PP&E, common stock, sales, services, wages and payroll.
Taxes help fund crucial public services, such as education, health care, and infrastructure. However, Scott Galloway, a renowned professor of marketing at NYU Stern School of Business, believes ...
The concept of "two sets of books" refers to the practice of keeping two sets of accounting ledgers ("books").In colloquial terms, this practice may refer to fraudulent behavior, i.e. attempting to hide or disguise financial transactions from outsiders by having a falsified set of records for official use and another for internal recordkeeping.