Front

The dollar value of long-term assets per each dollar of long-term debt. A high ratio suggests that there is a sufficient amount of long-term assets available to pay off long-term debt.

Back

long-term liabilities

Front

Interest rate (charge for borrowing money) that remains constant over the life of the loan.

Back

fixed interest rate

Front

Interest rate that fluctuates (changes) from period to period over the life of the loan.

Back

variable interest rate

Front

Systematic and periodic allocation of the costs of intangible assets to expense over their useful lives; periodically transferring the discount on a note or a bond to interest expense.

Back

amortization

Front

Obligations that require regular payments of principal and interest over the life of the loan.

Back

installment notes

Front

Pre-approved financing arrangement with a lending institution in which a business can borrow money up to the approved limit by simply writing a check.

Back

line of credit

Front

Debt security used to obtain long-term financing in which a company borrows funds from a number of lenders, called bondholders; usually issued in denominations of $1,000.

Back

bond certificate

Front

Party that issues the bond (the borrower).

Back

issuer (of a bond)

Front

The party buying a bond (the lender or creditor).

Back

bondholder

Front

Amount to be paid to the bondholder at bond maturity; base for computing periodic cash interest payments.

Back

face value (of bond)