Glossary: Assumptions

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Borrowing Base Assets: Finance term. For purposes of the analyses contained on this site, Accounts Receivable; Inventory; and Property, Plant and Equipment (Net).

Capital Expenditures (Net): Balance Sheet-related account. Periodic (e.g., annual, monthly, etc.) amount spent by a business on Property, Plant and Equipment. (The amount is net of disposals of Property, Plant and Equipment owned by the business).

Cash: Balance Sheet account. The sum of cash and marketable securities (securities convertible into cash in a short period of time) owned by a business.

Common Shares Outstanding (Fully Diluted): Balance Sheet-related account. The number of common equity shares outstanding, plus the additional number of common shares that would be outstanding if the holders of securities with common stock rights or conversion rights (e.g., options, warrants, convertible debt, preferred stock, etc.) were to exercise their rights and/or convert their securities into common stock.

Common Stock: Balance Sheet account. The amount paid by owners for shares of Common Stock. Common Stock represents the residual equity in the Assets and Net Earnings of a business.

Current Maturities: Balance Sheet account. The amount of long term debt (Term Loan and Subordinated Debt) that is expected to be paid within one year.

Depreciation (Net): Balance Sheet-related account. A period cost of operations reflecting the decline in the value of Plant, Property and Equipment due to use and the passage of time. (The amount is net of reductions in Accumulated Depreciation resulting from disposals of Property, Plant and Equipment)

Dividends as % of Net Earnings: Finance statistic. Dividends, divided by Net Earnings.

Estimated Borrowing Base as a % of Property, Plant and Equipment (Net): Finance statistic. Estimated percent of Property, Plant and Equipment (Net) a bank willing to lend to a business if the business pledges the Property, Plant and Equipment (Net) to the bank as collateral for a loan.

Estimated Borrowing Base as a % of Accounts Receivable: Finance statistic. Estimated percent of Accounts Receivable (net of disallowed or past due accounts) a bank willing to lend to a business if the business pledges the Accounts Receivable to the bank as collateral for a loan.

Estimated Borrowing Base as a % of Inventory: Finance statistic. Estimated percent of Inventory (net of Inventory reserves) a bank willing to lend to a business if the business pledges the Inventory to the bank as collateral for a loan.

Gross Margin %: Statement of Net Earnings statistic. Gross Margin on Sales, divided by Net Sales.

Income Tax Rate: Finance statistic. Provision (Credit) for Income Tax, divided by Earnings Before Income Tax.

Intangibles: Balance sheet account. Assets which are not physical in nature, and which are usually acquired by acquisition from another business. Examples include trademarks, copyrights, patents and goodwill.

Interest Rate on Borrowings: Principal Assumptions/Relationships Report statistic. Estimated interest rate charged on Line of Credit and Term Loan, including Current Maturities.

Interest Rate on Subordinated Debt: Finance statistic. Estimated interest rate charged on Subordinated Debt.

Investments: Balance Sheet account. Carrying value of a business' investment in another business, or in securities intended to be owned for more than one year.

Net Sales: Statement of Net Earnings account. For accrual-based businesses, the dollar amount of revenue earned (net of allowance accounts) during an accounting period.

Number of Days Cost of Goods Sold in Accounts Payable: Finance statistic. Accounts Payable, divided by Cost of Goods Sold, divided by 365.

Number of Days Cost of Goods Sold in Inventory: Finance statistic. Inventory, divided by Cost of Goods Sold, divided by 365.

Number of Days Operating Expenses in Accrued Expenses: Finance statistic. Accrued Expenses, divided by Operating Expenses, divided by 365

Number of Days Sales in Accounts Receivable: Finance statistic. Accounts Receivable, divided by Net Sales, divided by 365.

Operating Expenses as a % of Net Sales: Finance statistic. Operating Expenses, divided Net Sales.

Other Assets: Balance Sheet account. Long term assets of a business not elsewhere classified ( e.g., long term amounts receivable, amount of expenses prepaid beyond one year, etc.).

Other Current Assets: Balance Sheet account. Various other Assets expected to be converted into cash or otherwise liquidated within one year.

Other Current Liabilities: Balance Sheet account. Various other Liabilities payable within one year.

Other Current Obligations: Balance Sheet account. Various other Liabilities payable within one year.

Other Equity: Balance Sheet account. Other Owners' Equity account(s) not elsewhere defined (e.g., foreign currency translation).

Other Income (Expense): Statement of Net Earnings account. Net amount of other income and expense items not elsewhere defined (e.g., gain on sale of assets, interest income, etc.).

Other Liabilities: Balance Sheet account. Various other Liabilities, not elsewhere classified, payable after twelve months from the Balance Sheet date (e.g., non-current deferred taxes).

Other Long Term Obligations: Balance Sheet account. Various other Liabilities, not elsewhere classified, payable after twelve months from the Balance Sheet date (e.g., non-current portion of deferred compensation obligations).

Preferred Stock: Balance Sheet account. A class of stock which has certain rights ( e.g., rights to dividends, class voting rights, etc.) superior to those of Common Stock.

Subordinated Debt: Balance Sheet account. A long term liability (payable after twelve months from the Balance Sheet date) payable to a class of creditors whose rights are junior to some other class or classes of creditors of a business.

Taxes Payable: Balance Sheet account. A liability of a business for federal and state income taxes owed but not yet paid.

Term Loan: Balance Sheet account. A long term liability (payable after twelve months from the Balance Sheet date) payable to a class of creditors whose rights are senior to the providers of Subordinated Debt.

Treasury Stock: Balance Sheet account. The dollar cost of Common Stock of a business which has been purchased, by the business, from its owners.

Year-to-Year Change in Net Sales: Finance statistic. Current year's Net Sales minus prior year's Net Sales, divided by prior year's Net Sales.