Arms Index (TRIN)
What is the Arms Index? The Arms Index, also known as the Short-Term Trading Index (TRIN), refers to a short-term technical analysis trading indicator that compares the number of advancing and declining stocks issues with the advancing and declining volume. Arms Index Formula Developed by Richard W. Arms Jr. in 1967, the Arms Index is…
Negative Gap
What is Negative Gap? Negative gap is a term used to describe a situation in which a bank’s interest-sensitive liabilities exceed its interest-sensitive assets. Interest rate gap is important because it shows the risk of rate exposure and is often used by financial institutions to develop hedge positions. Institutions that profit from interest rate differentials…
Net Interest Rate Spread
What is Net Interest Rate Spread? Net interest rate spread refers to the difference between the interest rate a financial institution pays to depositors and the interest rate it receives from loans. In other words, it is the difference between the borrowing and lending interest rates of the bank. The interest rate spread is a…
After-Tax Contribution
What is After-Tax Contribution? After-tax contribution refers to the monetary contribution made to retirement systems after deducting taxes from the individual’s or corporation’s taxable income. After-tax contributions are extremely popular for investments, as they allow withdrawals made after retirement to be non-taxable since the tax’s already been paid previously. Understanding the entire process…
Form 4797
What is Form 4797? Form 4797 is a tax form required to be filed with the Internal Revenue Service (IRS) for any gains realized from the sale or transfer of business property, including but not limited to properties that generate rental income and properties that are used for industrial, agricultural, or extractive resources. Always consult…
Diversity Management
What is Diversity Management? Diversity management refers to organizational actions that aim to promote greater inclusion of employees from different backgrounds into an organization’s structure through specific policies and programs. Organizations are adopting diversity management strategies in response to the growing workforce diversity worldwide. Advancements in technology now allow companies to hire and manage employees…
Comfort Letter
What is a Comfort Letter? A comfort letter is a document of assurance issued by a parent company or an accounting firm to reassure a subsidiary company of its willingness to provide financial support. It is an affirmation letter, not a confirmation letter, that offers backup when a customer requires a loan or a company…
Zombie Company
What is a Zombie Company? A “zombie company” is a term used to describe an uncompetitive company that needs a bailout to operate successfully or an indebted company that is only able to repay interest on its debt (interest-coverage ratio of 1 or less). Such companies generate only enough cash flow to pay the interest…
Bankruptcy
What is Bankruptcy? Bankruptcy is the legal status of a human or a non-human entity (a firm or a government agency) that is unable to repay its outstanding debts to creditors. Generally, it is initiated by the debtor and imposed by a court. The word is derived from the Italian word banca rotta, which translates to…
