Common SAP CML/Banking Terms

This is second post of SAP CML/Banking common terms.

Shareholder Loans: The amount that a company owes to its shareholders. Most shareholder loans have no interest rate or fixed repayment terms.

Revenue/Sales: The value of all goods produced and sold and all services rendered during the fiscal period from the operation of the business.

Rollover: A term used to describe a transaction under which no gain or loss is recognized for tax purposes, so that the tax cost of an asset is "rolled over" to another asset or another taxpayer.

Selling Expenses: All expenses relating directly to selling and promoting company products or services.

Share Capital: Another name for capital stock.

Shareholders' Equity: The excess of assets over liabilities.

Par Value: A value printed on the face of the security certificate.

Periodic Inventory Method: An inventory accounting system that requires a physical count of inventory to determine the final amounts of raw materials, work in process, and finished goods, and hence also the cost of goods sold.

Perpetual Inventory Method: An inventory accounting system whereby a continuous record is kept that tracks raw material, work in progress, finished goods and cost of goods sold on a day-to-day basis.

Preferred Stock: A class of capital stock with special rights or restrictions, as compared with other classes of stock of the same company. The preference will generally relate to the distribution of dividends at a fixed or determinable annual rate, with or without priority for return of capital on liquidation. The restrictions generally apply to voting rights.

Prepaid Expenses: The unused total at the statement date of any item paid for in advance (insurance premiums, fall applied fertilizer).

Principal Payments: The current portion of long-term debt from the opening balance sheet. (The principal payment for the year ending December 31, 1998 would be the current portion of long-term debt that appeared on the balance sheet dated December 31, 1997 as that is the amount of principal that was scheduled to be paid in the year ending December 31 1998). If historical balance sheets are not available, the actual principal paid during the period is used.

Proformance Statements: A projection of what costs and revenue should be.

Forecast Provision for Bad Debts: A reserve account to allow for customers who cannot pay.

Quota: An intangible asset that is a license, or right, to sell a certain amount of a specific commodity.

Residual After Debt Service: Debt service capacity minus debt service requirements.

Residual for Growth: Residual after debt service minus depreciation plus principal payments. Represents the funds available for growth or investment.

Retained Earnings/Deficit: The accumulated balance of net income in excess of net losses of an incorporated business after any dividends and other appropriate charges or credits. A negative retained earnings balance is termed "deficit."