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Finance GlossaryDeferred Tax Liability
Deferred Tax Liability
Definition of Deferred Tax Liability
A deferred tax liability is line item on a company’s balance sheet that refers to taxes that owed but due in the future. Common examples of deferred tax liabilities include:
- Paying less tax
- Sales in instalments
Related Terms
Free Cash Flow
Free float market capitalization is the market cap of a company based on the total freely available publicly traded outstanding shares. The formula to calculate free float market capitalization is:
Free float market capitalization = Share Price x (Number of Shares Available for Trading – Private and Locked-In Shares)
When calculating the free float market cap of a company, the number of shares held privately or the shares that are locked-in are not taken into account. Typically, these shares are held by promoters and the government.
Free float market capitalization = Share Price x (Number of Shares Available for Trading – Private and Locked-In Shares)
When calculating the free float market cap of a company, the number of shares held privately or the shares that are locked-in are not taken into account. Typically, these shares are held by promoters and the government.
Systematic Investment Plan (SIP)
A systematic investment plan is a method in which an investor can contribute a fixed amount regularly to mutual funds. Usually, investors maintain a monthly frequency for SIPs. This investment strategy helps them build wealth over time through discipline. The power of compounding comes into play, while the rupee-cost averaging reduces the impact of volatility in the market. SIP is one of the most effective and popular tactics used in goal-based investments.
Comparable Company Analysis
Comparable Company Analysis (CCA) is a method used to evaluate a company’s value by comparing its essential metrics like EBIT, EBITA, and more with other companies.
The underlying assumption of CCA or “Comps” is that publicly traded companies from the same sector or industry will have similar metrics that are comparable.
The underlying assumption of CCA or “Comps” is that publicly traded companies from the same sector or industry will have similar metrics that are comparable.
Price Discovery
Price discovery is the process of determining the market price of an asset or security. It is a continuous, dynamic process that is driven by many factors such as supply and demand, investor sentiment, macroeconomic news, company-specific information, and market liquidity. In efficient markets, the forces of buying and selling naturally converge to establish a fair and current market price.
Assets
An asset is anything that has economic value and is owned by an individual, company, or group. Assets are bought to generate returns in the future.
Offer for Sale (OFS)
Offer for Sale (OFS) is a process that allows current shareholders, typically promoters, to sell their stake in a company when it gets listed via an Initial Public Offering (IPO). It is often used to dilute ownership or comply with regulatory norms and is completed within a short, predefined trading window.
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