What Is a Proprietary Reverse Mortgage? A proprietary reverse mortgage is a loan that allows senior homeowners to access the equity in their homes through a private lender. They are not as tightly regulated as home equity conversion mortgages (HECMs) and are not federally insured. Proprietary reverse mortgages make up only a small segment of the
What is Proprietary Trading? Proprietary trading refers to a financial firm or commercial bank that invests for direct market gain rather than earning commission dollars by trading on behalf of clients. Also known as “prop trading,” this type of trading activity occurs when a financial firm chooses to profit from market activities rather than thin-margin
What Is Pro Rata? Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to “in proportion,” which means a process where whatever is being allocated will be distributed in equal portions. If something is given out to people on a pro rata basis, it means assigning an amount to
What Is a Pro-Rata Tranche? A pro-rata tranche is a portion of a syndicated loan that is comprised of two features: a revolving credit facility, and an amortizing term loan. Pro-rata tranches are common within the leveraged loan market or in loans to companies with existing high debt loads. Within the pro-rata tranche, the revolving
What Is ProShares? ProShares, a division of ProFunds, manages various investment funds and has combined assets under management of over $60 billion. This makes it a small investment company compared to giant managers that have trillions in assets under management (AUM). Nonetheless, ProShares offers unique funds that track various indices and asset classes. The company has dozens
What Is the Profit Motive? The profit motive is the intent to achieve a monetary gain in a project, transaction, or material endeavor. Profit motive can also be construed as the underlying reason why a taxpayer or company participates in business activities of any kind. Simply put, the profit motive suggests that people tend to
What Is a Profit-Sharing Plan? A profit-sharing plan is a retirement plan that gives employees a share in the profits of a company. Under this type of plan, also known as a deferred profit-sharing plan (DPSP), an employee receives a percentage of a company’s profits based on its quarterly or annual earnings. A profit-sharing plan
What Is a Profits Interest? Profits interest refers to an equity right based on the future value of a partnership awarded to an individual for their service to the partnership. The award consists of receiving a percentage of profits from a partnership without having to contribute capital. In effect, it is a form of equity
What Is a Profit-Volume (PV) Chart? A profit-volume (PV) chart is a graphic that shows the earnings (or losses) of a company in relation to its volume of sales. Companies can use profit-volume (PV) charts to establish sales goals, analyze whether new products are likely to be profitable, or estimate breakeven points. Key Takeaways A
What Is Pro Forma? Pro forma means “for the sake of form” or “as a matter of form.” When it appears in financial statements, it indicates that a method of calculating financial results using certain projections or presumptions has been used. Pro forma financials are not computed using generally accepted accounting principles (GAAP) and usually leave
