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Financial terms in "Insurance"

1. Association of British Insurers

2. blanket insurance

3. data processors errors and omissions coverage

4. Direct Writer

5. free alongside (FAS)

6. sublimit

7. nonrescission provision

8. primary cover

9. signaling capital

10. guaranteed cost

11. Patient's Bill of Rights legislation

12. naturally occurring substances

13. Surrender Charge

14. Fraternal Benefit Society

15. basket aggregate

16. Accelerated Death Benefits

17. placement service agreement (PSA)

18. Insurance Score

19. event

20. incurred loss ratio

21. Associate in Loss Control Management (ALCM)

22. computer fraud coverage form

23. Inspection Report

24. schedule

25. severability of interests clause

26. Prepayment Of Premiums

27. FIRMette

28. Bornhuetter-Ferguson technique

29. multi-peril crop insurance (MPCI)

30. Policy Dividend Options

31. Uniform Task Based Management System (UTBMS)

32. voidable

33. reinsurer's margin

34. limited Mexico coverage endorsement

35. wrap-up

36. consent to settlement clause

37. named peril coverage

38. insider trading

39. collision

40. captive

41. equipment floater

42. Contestable Period

43. Senior Claim Law Associate (SCLA)

44. off-duty coverage

45. hybrid

46. litigation management

47. additional insured

48. estimator

49. Per Capita Beneficiary Designation

50. modified fire-resistive construction

51. reciprocal insurance

52. Port Risk

53. f-cubed litigation

54. subguard insurance

55. indemnitee

56. single-parent captive

57. concurrent causation

58. reasonable repairs

59. general exclusions

60. sponsored captive

61. cross purchase

62. manufacturers penalty insurance

63. extracontractual damages

64. manual premium

65. codefendant

66. motor home policy

67. mortgage redemption insurance

68. capital markets

69. Good Samaritan statutes

70. LC5/lethal concentration

71. medical payments, general liability

72. national flood insurance program

73. reporting form coverage

74. cost of debt

75. marine insurance

76. Insurance Regulatory Information System (IRIS)

77. First-party Coverage

78. Change in Policyholder Surplus (IRIS)

79. National Association of Registered Agents and Brokers (NARAB)

80. Brownian motion

81. rebating

82. Stock Insurance Company

83. foreign commerce

84. uberrimae fidae

85. fine arts coverage

86. development factor

87. Guaranteed Issue Right

88. option

89. Financing Entity

90. Mutual Insurance Companies

91. fire wall

92. act of God

93. portfolio

94. financial risk management

95. noncontributing, noncontributory

96. maintenance wrap-up

97. loading

98. revocable beneficiary

99. process

100. payroll limitation

Note: Maximum 100 records reached. Please narrow your search.

Featured term of the day

Definition / Meaning of

Free Cash Flows

Categories: Finance,

Cash not required for operations or for reinvestment. Often defined as earnings before interest (often obtained from the operating income line on the income statement) less capital expenditures less the change in working capital. In terms of a formula: free cash flows = Sales (Revenues from operations) - COGS (cost of goods sold-labor, material, book depreciation) - SG&A (Selling, general administrative costs) EBIT (earnings before interest and taxes or operating earnings) - Taxes (cash taxes) EBIAT (Earnings before interest after taxes) DEP (book depreciation) - CAPX (capital expenditures) - ChgWC (Change in working capital) C (free cash flows) There is an issue as to whether you want to define the FCFs to the firm as a whole (the cash flow to all of its security holders), or the FCFs only to the firm's equity holders. For firm valuation, you want the former; for stock valuation you want the latter. To value the firm, calculate the stream of FCFs to the firm and discount this stream by the firm's WACC (weighted average cost of capital). This will give you the value of a levered firm, including the tax benefits of debt financing. Alternatively, you can discount the firm's FCFs by its unlevered cost of capital and add separately the present value of the tax benefits. To value the firm's equity, you can either take the above number and subtract the market value of all outstanding debt (liabilities) or you can calculate the FCFs to the firm's equity holders and discount this stream by the firm's levered equity cost of capital. Notice that changes in working capital have the same effect on free cash flows as do changes in physical capital, i.e., capital expenditures. For example, suppose you had to spend $XX to increase the capacity of your plant. This expenditure would be a reduction in free cash flow in the year it was made. Likewise, if you had to increase the level of your cash balance, inventory or receivables by $XX to accommodate greater sales, then this too would result in a like reduction in free cash flows in the year the level of working capital was increased. [Definition and discussion courtesy of Professor Michael Bradley.]

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5. Storm Surge
6. Jumbo CD
7. Homeowner's Insurance
8. Genetic Information Nondiscrimination Act (GINA) Of 2008
9. CollegeSure CD
10. Sovereign Wealth Funds

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