GLOSSARY

Abandonment option The ability to terminate a project at some future time if the financial results are disappointing.

Accounts receivable turnover Ratio of sales on credit to the average balance in accounts receivable.

Acid test ratio See Quick ratio.

Acquiring company or acquirer The company in a merger or acquisition that is acquiring the target.

Acquisition The purchase of some portion of one company by another; the purchase may be for assets, a definable segment of another entity, or the purchase of an entire company.

Active strategy In reference to short-term cash management, an investment strategy characterized by monitoring and attempting to capitalize on market conditions to optimize the risk and return relationship of short-term investments.