Tracking Financial Performance Standards of ... - Sa-Dhan

Glossary of Financial TermsTermGoverning DocumentsGranteeGrantorGuaranteed LoanGuarantyHistorical CostHorizontal AnalysisImprovementIncomeIncome from OperationsIncome StatementIndependent Auditors' ReportIndirect ExpenseIndirect LaborInflationInformal Finance SystemOfficial legal documents that dictate how an entity is operated. The governingdocuments of a corporation include articles of incorporation and Bylaws; apartnership includes the partnership agreement; a trust includes the trustagreement or trust indenture; and an LLC includes the Articles of organizationand operating agreement.Person to whom property is transferred.(1) Person who transfers property. (2) Person who creates a trust.A pledge to cover the payment of debt or to perform some obligation if theperson liable fails to perform. When a third party guarantees a loan, it promisesto pay in the event of a default by the borrower.Legal arrangement involving a promise by one person to perform theobligations of a second person to a third person, in the event the secondperson fails to perform.Original cost of an asset to an entity.DefinitionThe comparison of each item in a company's financial statements in the currentperiod with the same item from a previous accounting period or periods. Thepercentage analysis of increases and decreases in corresponding items incomparative financial statements.Expenditure directed to a particular asset to improve its performance or usefullife.Inflow of revenue during a period of time. (See Net Income.)Gross profit minus operating expenses. Also called operating income. Theexcess of gross profit over total operating expenses.Summary of the effect of revenues and expenses over a period of time. Asummary of a business's revenue and expenses for a specific period of time,such as a month or a year. Other terms used to describe the income statementare earnings statement, operating statement, statement of operations, and profitand loss statement.A report accompanying financial statements, which chartered accountants(CPAs) express an opinion as to the fairness of the statements.An expense of operating a business that is not associated with a specificdepartment; an expense that benefits an entire business and would continueto exist even if a specific department were eliminated.The cost of those employees who work in the company, but not on the productitself. Example - Accountants not working in the credit programA period when prices in general are rising and the purchasing power of thecurrency (dollar or rupee or pound sterling) is declining."Informal" refers to types of institutions. Most community-based financialinstitutions are formal organizations, although they are not normally targetedfor a particular purpose. While every group exhibits some degree of formality,the term "informal" is used principally to describe traditional systems of savingsand loans.127