The role of this glossary is to present brief definitions of most of the key concepts in corporate finance and management (in total 900 names-definitions) with aim the reader to be able to understand and become familiar with the terminology in the analyses that will present in the category Corporate & Business.
Additionally, we hope that the reader by acquiring intimacy with the specific terminology, he will also love the science of finance and management, giving to it a significant part of his personal time.
In the following glossary we tried to include the most well-known definitions and terms in the field of Corporate Finance & Management. If you still find that a term or definition is missing and you know that it can be included in this glossary, please do not hesitate to contact us via the contact form of our web-site (Contact Us) and the Liberal Globe will edit it and will include it.
Glossary Corporate Finance & Management
There are currently 59 names in this directory beginning with the letter M.
Management
the process of designing and maintaining an environment in which individuals work together in groups accomplish efficiently selected aims.
Management as a science
organized knowledge-concepts, theory, principles, and techniques-underlying the practice of managing; science systematically explains phenomena in managing, as it does in any field.
Management as an art
the use of underlying knowledge (science) and application of it to realities in a situation, usually with blend or compromise, to obtain practical results; managing is an art, but management is more properly used to refer to the body of knowledge-science-underlying this art.
Management auditing
is auditing the quality of managers through appraising them as individual managers and appraising the quality of the total system of managing in an enterprise.
Management buy-out (MBO)
a going-private transaction led by the incumbent managers of the formerly public firm.
Management information system
a technique, usually by use of a chart, whereby managers in an enterprise are designated as promotable now, promotable in one year, have potential for future promotion, are satisfactory but not promotable, or should be terminated. Another term for “inventory chart” is “management replacement chart”.
Managerial conglomerates
are conglomerate firms which provide managerial expertise, counsel, and interaction on decisions to operating units. Based on the transferability of generic management skills even across non-related businesses.
Managerial entrenchment hypothesis
a theory that antitakeover efforts are motivated by managers self-interests in keeping their jobs rather than in the best interests of shareholders.
Managerialism
a theory that managers pursue mergers and acquisitions to increase the size of the organizations they control and thus increase their compensation.
Managers
those who undertake the tasks and functions of managing, at any level in any kind of enterprise.
Managers, goal of
to so establish and maintain an environment for performance that individuals will contribute to group objectives with the least cost-whether money, time, effort, materials, discomfort, or dissatisfaction-to create a surplus value, or “profit”.
Managing by objectives
programs of basing much of managerial planning, operation and appraisal on having each manager set objectives in verifiable terms (with the superior’s approval) and assessing his or her performance against the achievement of these objectives. Sometimes called management by objectives or “MBO”. More recently, MBO is seen as a system of managing that includes key managerial activities in planning, organizing, staffing, leading and controlling.
Manufacturing automation protocol (MAP)
a network of machines and various office devices hooked together.
Margin
cash or securities set aside by an investor as evidence that he or she can honor a commitment.
Marked-to-market
an arrangement whereby the profits or losses on a futures contract are settled up each day.
Market-adjusted return
the return for a firm for a period is its actual return less the return on the market-index for that period.
Market-extension merger
a combination of firms whose operations had previously been conducted in non-overlapping geographic areas.
Market-model
in event studies, the most widely used method of calculating the return predicted if no event took place. In this method, a clean period (with no events) is chosen, and a regression is run of firm returns against the market index return over the clean period. The regression coefficient and intercept are then used with the market index return for the day of interest in the event period to predict what the return for the firm would have been on that day had no event taken place.
Market-value rule
the principle that all decisions of a corporation should be judged solely by their contribution to the market value of the firm’s stock.
Master limited partnership (MLP)
an organizational form in which limited partnership interests are publicly traded (like shares of corporate stock), while retaining the tax attributes of a partnership.
Matrix organization
a form of organization in which two or more basic types of departmentation are combined; in engineering and marketing this is likely to be a combination of project (or product) and functional departments with one overlaying the other; often referred to as “grid” organization structures, “project” “or “product management”.
Maturity factoring
is factoring arrangement that provides collection and insurance of accounts receivable.
Maximum limit offers
a stock repurchase tender offer in which all tendered shares will be purchased if the offer is undersubscribed; but if the offer is oversubscribed, shares may be purchased only on a pro rata basis.
Mean adjusted return
the actual return for a period less the average (mean) return calculated for a time segment before, after, or both in relation to the event.
Medium-term Note
debt with a typical maturity of one to ten years that is offered regularly by a company using the same procedure as commercial paper.
Mezzanine financing
subordinated debt issued in connection with leveraged buyouts. Sometimes carries payment-in-kind (PIK) provisions, in which debt holders receive more of the same kind of debt securities in lieu of cash payments underspecified conditions.
Milestone budgeting
is budgeting by breaking down a program or project into identifiable and controllable pieces or “milestones”.
Minority squeeze-out
the elimination by controlling shareholders of non-controlling (minority) shareholders.
Misappropriations doctrine
a rationale for insider trading prosecution of outsiders who trade based on information which they have “misappropriated”, i.e. stolen form their employers or obtained by fraud.
Mismatch bond
floating rate note whose interest rate is reset at some frequent intervals than the rollover period (i.e. a note whose payments are set quarterly based on the 1-year interest rate).
Missions (or purposes)
the basic function or task of an enterprise or agency or any department of it.
Money market deposit account (MMDA)
in return for maintaining a minimum balance, the depositor receives both interest on the account and limited checking privileges.
Money purchase plan
a defined contribution pension plan in which the firm contributes a specified annual amount of cash as opposed to stock bonus plans in which the firm contributes stock, and profit-sharing plans in which the amount of the annual cash contribution depends on profitability.
Monte Carlo simulation
method for calculating the probability distribution of possible outcomes i.e. from a project.
Moral Hazard
one party (principal) relies on the behavior of another (agent) and it is costly to observe information or action. Opportunistic behavior in which success benefits one party and failure injures another, i.e. high leverage benefits equity holders under success and injures creditors under failure.
Motives
the drives, desires, needs, wishes and similar forces that channel human behavior toward goals.
Mudding through
an approach to strategy formulation in which policy makers focus only on those alternatives which differ incrementally (i.e., only a little) from existing policies rather than considering a wider range of alternatives.
Multidivisional corporation (M-form)
an organizational form to achieve greater efficiency via profit centers to reduce the need for information flow across divisions and to guide resource allocation to the highest-valued uses. Benefits form large fixed investment in general management expertise (especially strategic planning, monitoring and control) spread over several individual decentralized operations (at which level decision making on specific management functions takes place).
Multinational corporations
are corporations headquartered usually in one country but having operations (usually at least manufacturing and marketing) in other countries.
Multinational enterprise (MNE)
a business organization with operations in more than one country, beyond import/export operations.
Multiple-discriminant analysis (MDA)
statistical technique for distinguishing between two groups based on their observed characteristics.
Multiplier bonds
are bonds that provide the option of taking the interest payment in the form of additional multiplier bonds. Also called bunny bonds.
