LEVERAGE RATIOS Definition

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LEVERAGE RATIOS measures the relative contribution of stockholders and creditors, and of the firms ability to pay financing charges. Value of firms debt to the total value of the firm.

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POSITIVE CONFIRMATION is the positive form of a receivables confirmation asking the customer to respond whether the customer agrees or disagrees with the client's reported receivable balance. The negative form of accounts receivable confirmation asks the client's customer to respond only if the customer disagrees with the balance determined by the client. The negative form is used when controls over receivables are strong and accounts receivable consists of many accounts with small balances. The positive form is used when controls are weak or there are fewer, but larger, accounts.

STABILIZED INCOME is the projected planned revenue that is subject to change but represents the best annualized estimate of consistent income.

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