Renaissance for LEADERS

Peak Performance Resources for Leaders by Leaders

Tag: Assets

Capital

1. Material wealth in the form of money or property. 2. Wealth in the form of cash or property that can be used to earn income. 3. The net worth of a business, which is the amount by which its assets are greater than its liabilities. 4. What you own free and clear. 5. Money that can be used to produce further wealth. 6. Advantage derived from or useful in a particular situation. 7. Any resource or resources that can be used to generate economic wealth. 8. The capitalist class considered as a group. 9. The assets of a business that remain after its debts and other liabilities are paid or deducted.

Capital Gain

1. The amount by which proceeds from the sale of a capital asset exceed the cost basis. 2. In real estate and investments, the difference between the purchase price and the sale price when the sale price is more. When an investor buys an asset and sells it for a higher price, they incur a capital gain. In the United States, Capital Gains are taxed at a lower rate than other income if the asset is held for longer than one year. An investor may use capital losses to offset gains to minimize their taxes.

Financial Plan

A working document that includes a vision statement, long and short term financial goals, current income and expense statements, balance sheet, cash flow forecast, asset allocation plans, return on investment metrics, tax liabilities and management, life, income and medical insurance policies, financial records archive, future estate and retirement plans, opportunity cost analysis, measurement metrics and milestones, specific action plans to achieve the stated goals, as well as contingency arrangements, alternative courses of action and critical path analysis.

Intellectual Property

Intangible assets that are products of the intellect that is the result of creativity, with commercial value including trademarks, copyrighted property such as literary or artistic works, patents, business methods, ideas, know-how, systems, and industrial processes, etc.

Liquidity

1. The state of being liquid. 2. The quality of being readily convertible into cash: an investment with high liquidity. 3. Available cash or the capacity to obtain it on demand. 4. The ease with which an asset can be converted into money. Cash is liquid but shares in a company are less liquid because they must be sold in order to convert them into money. Assets such as property are even less liquid because they take longer to sell than shares.

Portfolio

A collection of investments held by an investment company, hedge fund, financial institution or individual. The more diversified the investments in a portfolio, the more likely the investor is to earn the same return as the market. Can be represented as a pie that is divided into pieces of varying sizes, representing a variety of asset classes and types of investments designed to achieve the ideal risk-return asset allocation.

Resource

1. Something or someone that can be used for support or help. 2. An available supply that can be drawn upon. 3. Something that can be used to advantage. 5. Available capital; assets.

Securitization

The process of converting an asset or pool of assets (or debt) into marketable securities in order to sell them to investors. The value and cash flows of the new security (financial instrument) are based on the underlying value and cash flows of the assets. Companies will securitize illiquid assets in order to increase their overall liquidity and generate immediate proceeds from their assets.

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