Page 9 - T.T. FINANTIAL

FINANTIAL TERMS

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• DEBT-TO-EQUITY RATIO: The ratio found by dividing long-term debt by the
equity (all assits minus debts) held in stock (This is a

measure of financial risk.)
• DEFAULT: A term that denotes the failure to pay the principal or interest on a
financial obligation (such as a bond).
• DEFAULT RISK: The risk that a company will default, or fail to need its
financial obligations, i.e., fail to pay the interest or principal
on its bonds.
• DEPRECIATION: The decrese in value due to wear and tear, decay, decline in
price, e.g., a new car purchased at $20,000 depreciates to
$5,000 in five years.
• DISCOUNT BOND: A bond whose value is less than its face amount.

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