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 32 names in this directory beginning with the letter O.
Off-balance sheet financing
is the financing that is not shown as a liability in a company’s balance sheet.
Old-line factoring
is the factoring arrangement that provides collection, insurance and finance for accounts receivable.
On the run
the most recently issued (and therefore, typically the most liquid) Treasury bond in a maturity range.
Open account
arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, and the seller records the sale in the sales ledger.
Open corporations
Fama and Jensen’s term for large corporations whose residual claims (common stock) are least restricted. They identify the following characteristic:
1) They have the property rights in net cash flows for an identified horizon,
2) Stockholders are not required to hold any other role in the organization,
3) Common stock is alienable (transferrable, saleable) without restriction.
Open-market share repurchase
refers to a corporation’s buying its own shares on the open market at the going price just as any other investor might buy the corporation’s shares; as opposed to a tender offer for share repurchase or a negotiated repurchase.
Operating synergy
combining two or more entities results in gains in revenues or cost reductions because of complementarities or economics of scale or scope.
Operational audit
the regular and independent appraisal by a staff of internal auditors of the accounting, financial, and other operations of an enterprise.
Operational management theory and science
an analysis of management which draws together knowledge that a unique to managing and knowledge form other fields pertinent to managing and relates it to the managerial practitioner.
Operations research
the use of mathematical models to reflect the variables and constraints in a situation and their effect on a selected goal, ordinarily thought of as using optimizing models; the application of scientific method in a problem situation with a view to providing a quantitative basis for arriving at an optimum solution in terms of goals sought.
Opportunity cost of capital (cost of capital, hurdle rate)
expected return that is forgone by investing in a project rather than in comparable financial securities.
Organization
a concept used in a variety of ways such as
1) a system or patterns of any set of relationships in any kind of undertaking,
2) an enterprise itself,
3) cooperation of two or more persons,
4) all behavior of all participants in a group,
5) the intentional structure of roles in a formally organized enterprise.
Organization capital
firm-specific informational assets which accumulate over time to enhance productivity. Includes information used in assigning employees to appropriate tasks, and forming teams of employees, and the information each employee acquires about other employees and the organization. Alternatively, defined by Cornell and Shapiro as the current market value of all future implicit claims the firm expects to sell.
Organization culture
the general pattern of behavior, shared beliefs, and values that members of an organization have in common.
Organization development (OD)
a systematic integrated and planned approach to improving the effectiveness of groups of people and of the whole organization. OD uses various techniques for identifying and solving problems.
Organizational authority
the degree of discretion in organizational positions conferring on persons occupying these positions the right to use their judgement in decision making.
Organizational learning
the improvement in skills and abilities of individual or groups (teams) of employees through learning by experience within the firm. Includes managerial learning (generic, as well as industry specific) and nonmanagerial labor learning.
Organizational role
an organizational position for individuals to fill; to be meaningful to people, it should incorporate
1) verifiable objectives,
2) a clear concept of the major duties or activities involved,
3) an understood area of discretion, or authority,
4) the availability of information and resources necessary to accomplish a task.
Original plan poison pill (preferred stock)
an early poison pill antitakeover defense in which the firm issues a dividend of convertible preferred stock to its common stockholders. If an acquiring firm passes a trigger point of share ownership, preferred stockholders (other than the large block holder) can put the preferred stock to the target firm (force the firm to redeem it) at the highest price paid by the acquiring firm for the target’s common or preferred stock during the past year. If the acquirer merges with the target, the preferred can be converted into acquirer voting stock with a market value no less than the redemption value at the trigger point.
Ownership flip-in plan
a poison pill antitakeover defense often included as part of a flip-over plan. Target stockholders are issued rights to purchase target shares at a discount if an acquirer passes a specified level of share ownership. The acquirer’s rights are void and his or her ownership interest becomes diluted.
