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September 08th 2010.

Financial Glossary

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M  ( 27 DEFINITIONS )

Main diagonal
The main diagonal is the set of entries in a square matrix or table that runs from the upper left to the lower right.   top

Maintenance of financial capital (nominal dollar capital maintenance)
Maintenance of financial capital is the concept that income results only after preserving financial capital in dollars. The closing amount of net financial assets must exceed the amount at the start (excluding additional owner transactions) before income is present.    top

Maker
The maker is another name for the borrower with respect to notes payable.    top

Management accounting
Management accounting is the set of rules and conventions used by an organization for reporting to internal parties for decision making, control, planning, and internal performance evaluation.    top

Management auditing
Management auditing is also known as internal auditing, operational auditing, or performance auditing. It is the study of business operations for the purpose of making recommendations about the economic and efficient use of resources, effective achievement of business objectives and compliance with company policies.    top

Management by exception
Management by exception is a system of management in which standards are set for various operating activities, with actual results then compared against these standards. Any differences that are deemed significant are brought to the attention of management as "exceptions."   top

Management fraud
Management fraud, also known as fraudulent financial reporting, is the deliberate fraud committed by management that injures investors and creditors through materially misleading financial statements.   top

Management's discussion and analysis (MD&A)
Management's discussion and analysis (MD&A) is a section of the annual report that provides an overview of the corporation's operations and financial position noting any special or unusual circumstances that may have affected the financial results.   top

Managerial labour market
The managerial labour market constantly evaluates manager performance. A manager's reputation determines the value that the market places on that particular manager. A manager who discloses false or misleading information will suffer damage to his/her reputation. Therefore, the managerial labour market provides incentive for reliable information production.   top

Manufacturing cycle
The manufacturing cycle is where the product is produced (or the operation is performed).   top

Manufacturing cycle efficiency (MCE)
Manufacturing cycle efficiency (MCE) is the process (value-added) time as a percentage of throughput time.   top

Manufacturing cycle time
The manufacturing cycle time, also known as throughput time, is the time required to turn raw materials into completed products.    top

Manufacturing overhead costs
Manufacturing overhead costs are all costs associated with manufacturing except direct materials and direct labour. Examples of these costs would include factory rent, supervisors' salaries, and indirect materials.   top

Margin of safety
The margin of safety is the margin by which the return on assets exceeds the average interest rate on fixed term securities. A smaller spread indicates higher risk of negative leverage. It is also the excess of budgeted or actual sales over the break-even volume of sales.   top

Marginal cost (revenue)
The marginal cost (revenue) is the rate of change in cost (revenue), usually due to one additional unit of output (sales).    top

Marginal costing
Marginal costing, also known as variable costing, is a costing method that includes only variable manufacturing costs - direct materials, direct labour, and variable manufacturing overhead - in the cost of a unit of product.    top

Marginal tax rate
The marginal tax rate is the additional income tax payable if one dollar of income is added to the taxable income already computed. Furthermore, the marginal tax rate is also the decrease in income tax payable if one dollar of deduction is removed from taxable income.   top

Markdown
A markdown is a reduction in an original sales price.   top

Markdown cancellation
A markdown cancellation is an increase in a previously reduced sales price that does not exceed the original sales price.   top

Market capitalization rate
The market capitalization rate is the rate of discount which investors apply to future cash flows when establishing the current market price for a security. It also represents the effective yield provided by the security, or the discount rate that, if applied to anticipated cash flows, equates the present value of such cash flows with the current market price of the security.   top

Market portfolio
A market portfolio is an investment portfolio encompassing all risky assets. This is the most diversified portfolio of risky assets available to investors, and has a beta coefficient of one.   top

Market value method of accounting for investments
The market value method of accounting for investments uses investment values based on market value rather than cost. Changes in market value can be included in the income of the period or deferred.   top

Market-related value of pension assets
Market-related value of pension assets is the value of pension fund assets that are based on fair values but not on the current fair value.   top

Marketable securities
Marketable securities are investment securities sold in active markets with readily determinable market prices.   top

Marking to market
Marking to market is a procedure followed by futures market clearing houses to rewrite futures contracts daily so that all future contracts for a given commodity and with a given maturity specify the same futures price. If this rewriting confers a gain or loss on a trader, that trader's margin account is adjusted to compensate.   top

Markup
A markup is the difference between purchase cost and original sales price.   top

Matching
Matching is the recognition of expenses in the same time period that the revenues generated by incurring the expense are recognized.   top