Glossary 635Liquidity:the ability to quickly convert property to cash or pay a liability.
Long:To enter a future or for ward as the long party. Also known as “buying” the fu-
ture or for ward.
Long party:The party in a for ward or future contract that will take delivery of
the underlying asset and make payment, that is, the buying party. The party in a for-
ward or future contract that benefits from a rise in the price of the underlying
asset.
Management ’s Discussion and Analysis of Results of Operations and Finan-
cial Condition (MD&A):A report required under Securities and Exchange Com-
mission regulations, constituting part of an S-1 for an IPO and an annual report on
Form 10-K. The discussion of operations is required to include material nonrecurring
items of revenue, gain, expense, and loss.
Mark to market:The process by which at the end of each trading day, a payment is
made from one party in a futures contract to the other, based on that day’s movement
in the futures price. When the futures price rises, the short party pays the long party
the amount of the price rise. When the futures price falls, the long party pays the
short party the amount the price fell.
Market (market-based) approach:A general way of determining a value indica-
tion of a business, business ownership interest, security, or intangible asset by using
one or more methods that compare the subject to similar businesses, business owner-
ship interests, securities, or intangible assets that have been sold.
Marketability:The ability to quickly convert property to cash at minimal cost.
Master budget:The total budget package of an organization, including both the
operating and financial budgets. Sometimes referred to as the profit plan.
Material items:Items of sufficient size to have the potential to inf luence decision
makers or other users of financial statements.
Material variance: A measure of the change in cost of materials used, analyzed
according to price changes and changes in material efficiency.
MD&A:See Management ’s Discussion and Analysis of Results of Operations
and Financial Condition.
Mega-:The prefix given to another number which means a million. Thus, a 10
megabyte file contains 10,000,00 bytes or characters of data.
Merger: The combination of two or more companies into a single entity
Minority discount: A discount for lack of control applicable to a minority interest.
Minority interest:An ownership interest less than 50% of the voting interest in a
business enterprise.
Modem: A device used to allow computers to communicate with each other over
wires not originally designed for computer communications. The most common
form of modem allows computers to communicate over regular voice telephone
wires. Cable modems allow computers to communicate using wires originally de-
signed for cable TVs.
Monetary assets and liabilities:Assets and liabilities that represent a fixed
number of monetary units. Monetary assets include cash and accounts receiv-
able; monetary liabilities include accounts and notes payable. During inf lationary
periods monetary assets (liabilities) result in purchasing power gains (losses),
respectively.