What Is an Asset-Backed Commercial Paper (ABCP)? An asset-backed commercial paper (ABCP) is a short-term investment vehicle with a maturity date that is typically between 90 and 270 days. A bank or other financial institution typically issues the security itself. The notes are backed by the company’s physical assets such as trade receivables. Companies will
What Is Asset Size? Asset size is the total market value of the securities in a fund. It can also be referred to as assets under management. Funds regularly report total assets which can be affected by supply, demand and market return. Asset Size Explained Asset size for mutual funds is often reported by share
What Is an Asset Acquisition Strategy? An asset acquisition strategy is when one company buys another company through the process of buying its assets, as opposed to a traditional acquisition strategy, which involves the purchase of stock. Key Takeaways An asset acquisition strategy is the purchase of another company through the process of buying its
What Is Asset Allocation? Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an individual’s goals, risk tolerance, and investment horizon. The three main asset classes—equities, fixed-income, and cash and equivalents—have different levels of risk and return, so each will behave differently over time.
What Is an Asset Base? An asset base refers to the underlying assets that give value to a company, investment, or loan. The asset base is not fixed; it will appreciate or depreciate according to market forces, or increase and decrease as a company sells or acquires new assets. Although it is completely normal for
What Is an Asset-Based Approach? An asset-based approach is a type of business valuation that focuses on a company’s net asset value. The net asset value is identified by subtracting total liabilities from total assets. There is some room for interpretation in terms of deciding which of the company’s assets and liabilities to include in the
What Is Asset-Based Finance? Asset-based finance is a specialized method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment, or real estate as collateral. It is essentially any loan to a company that is secured by one of the company’s assets. Asset-based funding is often used to pay
What Is Asset-Based Lending? Asset-based lending is the business of loaning money in an agreement that is secured by collateral. An asset-based loan or line of credit may be secured by inventory, accounts receivable, equipment, or other property owned by the borrower. The asset-based lending industry serves business, not consumers. It is also known as asset-based
What Is an Asset Condition Assessment? An asset condition assessment is a report outlining how an organization can manage capital assets to improve its asset management operations. An asset condition assessment (ACA) is most commonly associated with organizations that manage physical assets, such as bridges, roads, and equipment, and is used to decide upon preventative
What Is the Asset Coverage Ratio? The asset coverage ratio is a financial metric that measures how well a company can repay its debts by selling or liquidating its assets. The asset coverage ratio is important because it helps lenders, investors, and analysts measure the financial solvency of a company. Banks and creditors often look
