ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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INVESTMENT HOLDING COMPANY Definition
INVESTMENT HOLDING COMPANY, generally, is to hold by way of investment any real or personal property whatsoever. Within business, it is a company which holds equity in or invests into other companies as subsidiary or associate companies.
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CURRENT RATIO, a comparison of current assets to current liabilities, is a commonly used measure of short-run solvency, i.e., the immediate ability of a firm to pay its current debts as they come due. Current Ratio is particularly important to a company thinking of borrowing money or getting credit from their suppliers. Potential creditors use this ratio to measure a companys liquidity or ability to pay off short-term debts. Though acceptable ratios may vary from industry to industry below 1.00 is not atypical for high quality companies with easy access to capital markets to finance unexpected cash requirements. Smaller companies, however, should have higher current ratios to meet unexpected cash requirements. The rule of thumb Current Ratio for small companies is 2:1, indicating the need for a level of safety in the ability to cover unforeseen cash needs from current assets. Current Ratio is best compared to the industry. Formula: Current Assets / Current Liabilities
DEDUCTION is the act of deducting; subtraction. It is an amount that is or may be deducted, e.g. tax deductions.