The debt ratio is a financial ratio that measures the extent of a company’s leverage. The debt ratio is defined as the ratio of total debt to total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of a company’s assets that are financed by debt.
Incremental cost of capital is a capital budgeting term that refers to the average cost a company incurs to issue one additional unit of debt or equity. The incremental cost of capital varies according to how many additional units of debt or equity a company wishes to issue. Being able to accurately calculate cost of capital and the incremental effects of issuing more equity or debt can help businesses reduce their overall financing costs.
Reputational risk is a threat or danger to the good name or standing of a business or entity. Reputational risk can occur in the following ways:
Kamikaze defense is a type of takeover defense mechanism sometimes resorted to by a company to avoid being taken over. Not so drastic as ending its corporate life, a kamikaze defense nevertheless involves inflicting self-harm, or taking measures that are detrimental to business operations or financial condition to reduce its attractiveness to a hostile bidder. A kamikaze defense is desperate but the hope is that the takeover bid will be thwarted.
Wildcat drilling, also known as exploratory drilling, is the process of drilling for oil or natural gas in unproven or fully exploited areas that either have no concrete historic production records or have been fully exploited as a site for oil and gas output. This higher degree of uncertainty necessitates that the drilling crews be appropriately skilled, experienced and aware of what various well parameters are telling them about the formations they drill. The most successful energy companies are the ones with a very high rate of drilling success, irrespective of whether the wells are drilled in known areas of production.
Tomorrow next (tom next), is a short-term foreign exchange transaction where a currency is simultaneously bought and sold over two separate business days, those being tomorrow (one business day) and the following day (two business days from today), otherwise known as the spot date.
A home warranty is a residential service contract that covers the cost of maintaining household systems or appliances for a set period. A home warranty is different from a home insurance contract.
Project management involves the planning and organization of a company’s resources to move a specific task, event, or duty towards completion. It can involve a one-time project or an ongoing activity, and resources managed include personnel, finances, technology, and intellectual property.
Uncle Sam is a personified representation of either the United States federal government or the United States of America in general. In finances, Uncle Sam can also refer to the taxing authority (i.e., the Internal Revenue Service, or IRS), for instance, one may say: I have to pay Uncle Sam a portion of my income to pay for roads and hospitals.
An owner-occupant is a resident of a property who holds the title to that property. In contrast, an absentee owner carries the title to the property but does not live there. An absentee landlord is a type of absentee owner.