What Are Long-Term Investments? A long-term investment is an account on the asset side of a company’s balance sheet that represents the company’s investments, including stocks, bonds, real estate, and cash. Long-term investments are assets that a company intends to hold for more than a year. The long-term investment account differs largely from the short-term
What Are Long-Term Liabilities? Long-term liabilities are a company’s financial obligations that are due more than one year in the future. The current portion of long-term debt is listed separately on the balance sheet to provide a more accurate view of a company’s current liquidity and the company’s ability to pay current liabilities as they
What Is the Look-Ahead Bias? Look-ahead bias occurs by using information or data in a study or simulation that would not have been known or available during the period being analyzed. This can lead to inaccurate results in the study or simulation. More importantly, a look-ahead bias can unintentionally sway simulation results closer into line
What Are Look-Alike Contracts? Look-alike contracts are a cash-settled financial product based on the settlement price of a similar exchange-traded, physically settled futures contract. Look-alike contracts are traded over the counter and they carry no risk of actual physical delivery regardless of the terms of the underlying futures contract. Futures look-alike contracts are regulated by
What Are Look-Through Earnings? Look-through earnings take the current period earnings of a company (as reported in a quarterly or annual report) and add to that figure all sources of earnings expected in the long run. Look-through earnings are not necessarily a quantity; instead, look-through earnings are based on the concept that a firm’s value
What Is Loan Syndication? The term “loan syndication” refers to the process of involving a group of lenders that fund various portions of a loan for a single borrower. Loan syndication most often occurs when a borrower requires an amount that is too large for a single lender or when the loan is outside the
What Is the Loan-To-Cost Ratio (LTC)? The loan-to-cost (LTC) ratio is a metric used in commercial real estate construction to compare the financing of a project (as offered by a loan) with the cost of building the project. The LTC ratio allows commercial real estate lenders to determine the risk of offering a construction loan.
What Is the Loan-to-Value (LTV) Ratio? The loan-to-value (LTV) ratio is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage. Typically, loan assessments with high LTV ratios are considered higher-risk loans. Therefore, if the mortgage is approved, the loan has a higher interest rate. Additionally, a loan with
What Is a Lobby? The term lobby refers to a group of people who band together and try to influence politicians and other individuals in public office. A lobby is typically formed to influence government officials to act in a way that is beneficial to the lobby’s or an industry’s best interests, either through favorable legislation or by
What Is a Lobster Trap? A lobster trap is a defense strategy used by small target firms to protect themselves against hostile takeovers initiated by larger corporations. Companies that employ this anti-takeover measure pass provisions in their charters that block shareholders with a stake of more than 10% from converting securities into voting shares. This prevents large
