CTP (AFP) flashcards
CTP · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Cash conversion cycle
- CCC = DIO + DSO − DPO. It measures the days between paying suppliers and collecting from customers, and a shorter cycle frees working capital.
- Days sales outstanding
- DSO = (average accounts receivable ÷ credit sales) × number of days. It shows the average collection period and is a core working capital metric.
- Net working capital
- Current assets minus current liabilities. Positive NWC indicates short-term obligations are covered by short-term assets; treasury targets the level set by policy.
- Segregation of duties
- A control that separates payment initiation, approval, execution, and reconciliation among different people so no single individual can create and conceal a fraudulent payment.
- In-house bank
- A centralized treasury structure in which the parent entity acts as internal bank for subsidiaries, providing loans, deposits, and netting instead of separate external bank arrangements.
- Payment factory
- A centralized unit that processes payments on behalf of group entities using shared systems, standardized formats, and a small set of banking partners.
- Quick ratio
- Cash plus marketable securities plus receivables, divided by current liabilities. It measures liquidity while excluding inventory, which may be slow to convert into cash.
- Notional cash pooling
- Banks offset debit and credit balances across accounts for interest calculation purposes only; no funds physically move, so local balances and legal ownership stay unchanged.
- Zero-balance account
- A disbursement account swept to a target balance, usually zero, at end of day, with funds drawn from a master concentration account to cover cleared items.
- Liquidity coverage ratio
- LCR = high-quality liquid assets ÷ net cash outflows over a 30-day stress period. Basel III requires the ratio to be at least 100 percent.
- Net stable funding ratio
- NSFR = available stable funding ÷ required stable funding over a one-year horizon. Basel III requires a minimum of 100 percent to limit structural liquidity risk.
- Collected balance
- The portion of an account balance representing funds for which the bank has received final settlement, excluding deposits still subject to hold or clearing float.
- Availability float
- The difference between the ledger balance and the collected balance, reflecting deposits not yet available for use because clearing has not completed.
- Cash positioning
- The daily process of aggregating opening balances, expected receipts, and expected disbursements to determine each account's ending position and funding needs.
- Transaction exposure
- The risk that exchange rate moves change the home-currency value of committed foreign-currency cash flows, such as payables, receivables, or firm orders.
- Translation exposure
- Accounting risk from converting foreign subsidiaries' financial statements into the parent's reporting currency; it affects reported equity rather than cash flow directly.
- Value at risk
- A statistical estimate of the maximum loss over a set horizon at a given confidence level, such as 1-day 99% VaR; it ignores losses beyond that threshold.
- ISDA Master Agreement
- A standard contract between derivatives counterparties that sets netting, default, and close-out terms, typically paired with a credit support annex for collateral.
- Positive pay
- A fraud control in which the company sends the bank an issued-check file; the bank rejects items that do not match the file's check number, amount, or payee.
- Repricing gap
- The difference between rate-sensitive assets and rate-sensitive liabilities repricing within a time bucket; it indicates how net interest income responds to rate changes.
- Interest rate swap
- An agreement to exchange fixed and floating interest payments on a notional principal, used to convert fixed-rate debt to floating or the reverse.
- Fedwire
- The Federal Reserve's real-time gross settlement system for large-value USD transfers; payments are immediate, final, and irrevocable once processed.
- CHIPS
- A private, multilateral net settlement system for large-value USD payments that settles at end of day, handling many international USD transfers with reduced liquidity needs.
- SWIFT
- A cooperative messaging network that transmits standardized financial instructions between institutions; it carries messages but does not itself settle or move funds.
- Same-Day ACH
- Nacha-operated processing windows that allow ACH credits and debits to settle the same business day rather than the next business day, for an added fee.
- ISO 20022
- A global standard for financial messaging using XML; it replaces SWIFT MT messages with richer structured data such as pain.001 and camt.053.
- RTP network
- A real-time, 24/7/365 US payment system for credit-push, irrevocable payments with immediate settlement and confirmation, operating outside the ACH and wire rails.
- Account analysis statement
- A bank statement that lists services provided, volumes, unit prices, and balances, used to calculate fees and offset them with an earnings credit.
- Earnings credit rate
- The rate a bank applies to a depositor's investable balances to offset service charges; earnings credit = eligible balance × ECR × days ÷ 360.
- BAI2 file
- A standardized flat-file bank statement format used for automated reconciliation, reporting balances and transaction detail through numeric type codes.
- CAMT.053
- An ISO 20022 bank-to-customer statement message providing structured end-of-day account balances and transaction details for automated reconciliation.
- Treasury management system
- Software that centralizes cash positioning, forecasting, payments, bank connectivity, debt and investment tracking, and accounting entries for the treasury function.