What is a Set-Off Clause? A set-off clause is a legal provision that allows a lender to take the deposits of a debtor who has defaulted on a loan. A set-off clause is also a provision that allows a party to set off the financial liability of an obligor in a financial contract. Oftentimes, a set-off clause is a settlement method between a lender and ...

What are Estimated Tax? Estimated tax is an estimated amount that is paid periodically on ones earned income to cover the tax liability. Estimated tax is calculated for those income sources that are not directly subject to withholding taxes, such as dividend earnings, self-employment income, rental income, interest income, and capital gains etc. How...

What is a Conforming? In the United States, there are certain guidelines that loans are required to meet as stipulated by government agencies. If a loan meets the stated requirements, it is a conforming loan. A Conforming Loan must meet the dollar amount, otherwise known as the financing limit set by the Federal Housing Finance Agency (FHFA) and fun...

What is the Price-to-Cash Flow Ratio? The price-to-cash-flow ratio refers to a multiple that compares the market value of a company relative to its operating cash flow per share. The ratio makes use of the operating cash flow by adding back non-cash expenses like amortization and depreciation to net income. In other words, it helps measure the compa...

What is a Run Rate? The run rate is a concept that describes the financial performance of a company by using the present financial information to predict what future performance would look like. The run rate gauges what the performance of a company would be in terms of finances if its current performance are extended or applied in the future. The ru...

What is Structural Unemployment? Structural unemployment refers to a type of unemployment resulting from technological change, structural rearrangement of organizations, competition by firms, and government policy. Structural unemployment is not caused by mere inflations or economic fluctuations, although, changes in the economy is also a contributi...

What is a Certified Asset Protection Analyst? The certified asset protection analyst (CAPA) is a professional designation that the American Academy of Financial Management (AAFM) awards to professionals who have completed certain courses in financial management. AAFM awards this professional designation to individuals who have completed CAPA courses...

What is a Seed Round? Startups need capital to get the business off the ground and to reach critical stages of growth. Early-stage investment capital is commonly referred to as seed capital. The idea is that this capital meets the early growth needs, similar to a seed transitioning into a plant. Seed financing is commonly raised from friends and fam...

What is Treasury Stock? Treasury stock, also referred to as reacquired stock, is the outstanding stock that the issuing company buys back from its stockholders. Repurchase of treasury stock typically reduces the number of outstanding shares in the open market and allows the issuing company to either resell such stock to the public or retire (cancel)...

What is a Concentration Ratio? In economics, a concentration ratio refers to the ratio of the market shares of a particular company in relation to the entire market size. This ratio also measures the size of a company or firm in comparison to the size of the whole market. Analysts often consider the 3-firm, 4-firm, 5-firm and 8-firm concentration ra...