A baseball reference applied to businesses that train employees only to have them leave for competing firms. A farm team typically has non-ideal practices that cause high employee turnover - often to bigger and more prestigious companies. Like sport farm teams, these companies fully train the employees only to have them leave to work for another company. Being a farm team for your competitors will often, over time, lead to the destruction of the business.
The term fake claims refers to insurance claims that are made fraudulently. These claims are made in an attempt for the policy holder to benefit financially from making claims that are false or exaggerated. While such practices are a fairly common occurrence, they are highly illegal. Fake claims are often exaggerations of valid claims to an insurance policy. For example, a homeowner insurance policy holder may have been the victim of a breaking and entering where items were stolen. The number (and value) of the stolen items may be exaggerated on the claims report, indicating that more items were stolen than really were. This exaggeration could lead to the homeowner receiving a larger claim settlement than that to which he or she is truly entitled. Large claims are often investigate to mitigate such problems.
The action of placing a trade or trades that go against the ticker tape. Someone who is buying stocks while the overall market is falling is said to be fighting the tape. Many traders say that fighting the tape is a cardinal sin.
A controversial computerized trading practice offered by some stock exchanges. Flash trading uses highly sophisticated high-speed computer technology to allow traders to view orders from other market participants fractions of a second before others in the marketplace. This gives flash traders the advantage of being able to gauge supply and demand and recognize movements in market sentiment before other traders.Flash orders are also known as "step-up orders" or "pre-routing orders". Flash orders have been subject to scrutiny because of the advantage they give traders who are able to participate in the orders. Flash trading has been compared to front running, and opponents believe that the practice is harmful to market transparency. Proponents of flash trading state that it is necessary to provide liquidity for exchanges.
An accounting buzzword that describe when companies still have inventory on hand that is not being sold due to inattention or obsolescence. While not an official type of accounting treatment, the term is named after the LIFO and FIFO accounting methods. Companies in a state of FISH accounting tend to have turnover rates that are lower than the industry average. Investors tend to avoid investing in companies that are in a "FISH-like" state, because having inventory lying about consumes expensive capital and storage space.
A commission paid to an intermediary or the facilitator of a transaction. The finder's fee is rewarded because the intermediary discovered the deal and brought it forth to interested parties. Depending on the circumstance, the finder's fee can be paid by either the transaction's buyer or seller.Also known as "referral income" or "referral fee". Often, the finder's fee may simply be a gift from one party to another, as no legal obligation to pay a commission exists. For example, let's examine a real estate transaction. Let's say that a friend is selling a property and you discover a potential buyer. If the transaction goes through, your friend may give you a small percentage of the sale, as a reward for finding the purchaser.
The specific mixture of long–term debt and equity that a company uses to finance its operations. This financial structure is a mixture that directly affects the risk and value of the business. The main concern for the financial manager of the company is deciding how much money should be borrowed and the best mixture of debt and equity to obtain. The financial manager also has to find the least expensive sources of funds for the company to use. Also referred to as capital structure. Financial structure is divided into the amount of the company's cash flow that goes to creditors and the amount that goes to shareholders. Each business will have a different mixture depending on its needs and expenses. Therefore, each company will have its own particular debt-equity ratio. For example, a company could issue bonds and use the proceeds to buy stock or it could issue stock and use the proceeds to pay its debt.
A financial designation, obtained through the Global Association of Risk Professionals (GARP) by achieving a passing score on the Financial Risk Manager (FRM) examination, having an active membership in GARP and by having two years of experience in financial risk management.The FRM program and exam, follows the major strategic disciplines of risk management: market risk, credit risk, operational risk and investment management. Recognized in over 90 countries across the globe, the FRM designation, is designed to measure a financial risk manager's ability to manage risk in a global environment. The FRM exam is challenging, having a pass rate of only 44.35% in 2007.