Glossary 627Asset (asset-based) approach: A general way of determining a value indication of
a business, business ownership interest, or security by using one or more methods
based on the value of the assets of that business net of liabilities.
Asset acquisition:an acquisition executed by purchasing the assets of the target
firm.
Asymmetric risk: An exposure that results in profits or losses only if the underlying
price or economic variable moves in one direction.
At-the-money:The condition of a call or put option when the strike price equals
the stock price. Some economists define at-the-money as being the case when the
stock price equals the present value of the strike price.
B2C e-commerce:The sale of goods and services between a company and a con-
sumer over the Internet.
Balanced scorecard:A comprehensive set of performance measures intended to
capture a more balanced picture of management’s success in achieving goals than can
be captured by financial measures only.
Bearish:Pessimistic. Anticipating a decrease in an asset value.
Best efforts underwriting: An agency arrangement by which under writers agree
to use best efforts to sell all, or a certain minimum number of, shares of a public
of fer ing.
Beta: A measure of systematic risk of a security; the tendency of a security’s returns
to correlate with swings in the broad market.
Bidder:The firm that initiates a merger or acquisition; the bidder usually retains
control of the surviving firm.
Bit:The smallest gradation of data stored in a computer. Technically, a bit is either
a 1 or a 0. Computers use groups of bits, called bytes, to represent character data.
Blue-sky laws:State laws regulating securities that provide for licensing
brokers/dealers and registering new securities issuances.
Budget:A comprehensive, quantitative plan for utilizing the resources of an entity
for some specified period of time—showing planned revenues, expenses, and result-
ing earnings—together with a planned balance sheet and cash f low statement. If bud-
gets adjust for volume they are called f lexible; other wise, they are static.
Budget entity:Any accounting entity, such as a firm, division, department, or
project, for which a budget is prepared.
Budget performance report:An internal accounting report that shows the differ-
ence between actual results and expected performance planned in a budget.
Budget review process:The process of evaluating budget proposals and arriving
at the master budget.
Budget variance:The difference between the budgeted data and actual results.
Bullish: Optimistic. Anticipating an increase in an asset value.
Business valuation:The act or process of determining the value of a business en-
terprise or ownership interest therein.
Byte:Typically, eight bits in a computer, which as a unit, represent one character of
data. A computer diskette can store 1,400,000 bytes of data, or 1,400,000 characters
of data. This represents about 500 pages of single-spaced text.