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Account payables turnover ratio :
A short-term liquidity measure used to quantify the rate at which a company pays off its suppliers. Accounts payable turnover ratio is calculated by taking the total purchases made from suppliers and dividing it by the average accounts payable amount during the same period.

accounts payables turnover ratio = (net purchases) / (short term accounts payables)  

Accounts receivables turnover rate :
An accounting measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.
accounts receivables turnover rate = (net sales) / (short term accounts receivables)

Acid-test ratio :
measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities.
(cash and cash equivalents + securities + accounts receivables + other receivables) / (short term liabilities)

Amortisation / Depreciation :
The practice of reducing the value of assets to reflect their reduced worth over time. The term means the same as depreciation, though in practice amortisation tends to be used for the write-off of intangible assets, such as goodwill, while either term is used for the write-off of fixed capital. Amortising an asset effectively transfers its value, or the part that is being written off, from the balance sheet to the profit and loss account, where it reduces taxable income. Depending on the relevant accounting standards, an intangible asset can be written off over time or all at once.

Asset accounts :
The net value held by a business of such things as liquid funds, investments, accounts receivable, unsold inventory, real estate, machinery and valuable intangibles. Each of those item categories can be summed up for a business to create its own asset account. Current asset accounts contain assets held for less than one year, while long term asset accounts contain those held for more than one year.

Assets : items of ownership convertible into cash; total resources of a person or business, as cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real estate (opposed to liabilities ).

Bad debt :
Amount owed to a business or individual that is written off by the creditor as a loss (and classified as an expense) because the debt cannot be collected and all reasonable efforts to collect it have been exhausted. This usually occurs when the debtor has declared bankruptcy or the cost of pursuing further action in an attempt to collect the debt exceeds the debt itself.

Balance sheet :
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.

Book value :
The value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. Traditionally, a company's book value is its total assets minus intangible assets and liabilities.

Simple interest:
A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate by the principal by the number of periods.
Simple interest = P x I x N
P: loan amount I: interest rate N: duration of loan  

Capital :
The wealth, whether in money or property, owned or employed in business by an individual, firm, corporation.

Capital increase :
A method used by corporations to raise share capital by giving existing shareholders the right to subscribe to new shares for cash. Alternatively, capital can be raised by exchanging assets such as shares in another company or by raising the par value of existing shares. New investors have the opportunity to become shareholders. Also known as seasoned equity offering.

Capital increase through rights issue :
A rights issue is an issue of rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a way to raise capital under a seasoned equity offering. Rights issues are sometimes carried out as a shelf offering. With the issued rights, existing security-holders have the privilege to buy a specified number of new securities from the firm at a specified price within a specified time.[1] In a public company, a rights issue is a form of public offering (different from most other types of public offering, where shares are issued to the general public).

Capital increase through bonus issue :
An offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout.

Cash flow :
A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing - although this also occurs as a result of donations or gifts in the case of personal finance. Cash outflows result from expenses or investments. This holds true for both business and personal finance.

Cash flow analysis :
Cash flow analysis is the study of the cycle of your business' cash inflows and outflows, with the purpose of maintaining an adequate cash flow for your business, and to provide the basis for cash flow management.

Cash flow statement :
Financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills.


Commandite company :
a form of partnership in which there are one or more silent partners who contribute funds but were liable originally only for the capital invested and later only according to a registered scheme of liability

Compound interest :
Interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt. Compounding of interest allows a principal amount to grow at a faster rate than simple interest, which is calculated as a percentage of only the principal amount.

Consolidated balance sheet :
A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm.

Corporate tax :
A levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable period; they are generally applied to companies' operating earnings, after expenses such as COGS, SG&A and depreciation have been deducted from revenues.

Cost-benefit analysis :
A process by which business decisions are analyzed. The benefits of a given situation or business-related action are summed and then the costs associated with taking that action are subtracted.

Current ratio :

The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations.

Current assets :

Current assets are important to businesses because they are the assets that are used to fund day-to-day operations and pay ongoing expenses. Depending on the nature of the business, current assets can range from barrels of crude oil, to baked goods, to foreign currency. 

Debt ratio :
A ratio that indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.
total debt / total assets

Debt to equity ratio :
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

total debt / total equity

Dividend :
Payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, it can either re-invest it in the business (called retained earnings), or it can distribute it to shareholders. A corporation may retain a portion of its earnings and pay the remainder as a dividend.

Financial expenses :
Interest, income taxes, and other such expenditure incurred in owning or renting an asset or property. 

Financial ratios :
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies.

Fixed assets :
A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into cash any sooner than at least one year's time.

Fixed cost :
A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.

Fixed capital :
Fixed capital refers to any kind of real or physical asset (such as land, buildings, vehicles and equipment) that is not used up in the production of a product. It is in contrast with capital such as raw materials, fuel and labor which are used up. Fixed capital is stays in the business almost permanently.

Fixed capital investments :
Assets or capital investments that are needed to start up and conduct business, even at a minimal stage. These assets are considered fixed in that they are not used up in the actual production of a good or service, but have a reusable value. Fixed-capital investments are typically depreciated on the company's accounting statements over a long period of time, up to 20 years or more.
 

Founder's share :
Issued to the originators of a firm, these shares (stock) normally do not receive any return until dividend payable to common stock holders (ordinary share holders) is paid out. However, these shares are entitled to all of the remaining (after tax) profits, no matter how much.

gross profit margin :
A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold.

Incorporated company :
An incorporated business (also called a corporation) is a type of business that offers many benefits over being a sole proprietor or partnership, including liability protection and additional tax deductions. Forming a corporation also allows you raise capital through sale of shares of your company.

Issued capital :
The amount of nominal value of share held by the shareholders. It is the face value of the shares that have been issued to the shareholders. Issued share capital and share premium represent the amount invested by the shareholders in the company. It is also known as the subscribed capital or subscribed share capital (US - stock capital).
 

Immovable property :
Immovable property includes premises, and property rights (for example, inheritable building right), houses, land and associated goods and chattels if they are located on, or below, or have a fixed address. It is delimited by geographic coordinates or by reference to local landmarks, depending on the jurisdiction.

Income statement :
A financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year.

Intangible goods :
Goods that can not be touched, as opposed to a physical good (an object). Digital files such as a piece of music, a picture, or a news article are all examples of intangible goods. In an increasingly digitized world, intangible goods play a more and more important role in the economy. Virtually anything that is in a digital form and deliverable on the Internet can be considered an intangible good. In ordinary sense, an intangible good should not be confused with a service, since a good is an object whereas a service is a labor. So a haircut is a service, not an intangible good.

Inventory :
The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale. Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders/owners.

Inventory turnover :
A ratio showing how many times a company's inventory is sold and replaced over a period. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or "inventory turnover days".

Institutional investor :
A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.
 

Libor 
The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. It is usually abbreviated to Libor, or more officially to BBA Libor (for British Bankers' Association Libor) or the trademark bbalibor. It is the primary benchmark, along with the Euribor, for short term interest rates around the world.

Liquidity :
The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

Liquidity ratio :
Liquidity ratio, expresses a company's ability to repay short-term creditors out of its total cash. The liquidity ratio is the result of dividing the total cash by short-term borrowings. It shows the number of times short-term liabilities are covered by cash. If the value is greater than 1.00, it means fully covered.

Return on assets : Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income / sales) multiplied by asset utilization (sales/assets).


Mortgage :
A debt instrument that is secured by the collateral of specified real estate property and that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large purchases of real estate without paying the entire value of the purchase up front.

Net assets :
Value of an entity's assets less the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value. This may also be the same as the book value or the equity value of a business. Net asset value may represent the value of the total equity, or it may be divided by the number of shares outstanding held by investors and, thereby, represent the net asset value per share.

Net present value :
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

Opportunity cost :
The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Price / earning ratio :

A valuation ratio of a company's current share price compared to its per-share earnings: Market Value per Share / Earnings per Share

Profit :
A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something.

Profit margin :
A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.

Profitability ratios :
A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well.

Public Offering :

The sale of equity shares or other financial instruments by an organization to the public in order to raise funds for business expansion and investment. Public offerings of corporate securities in the U.S. must be registered with and approved by the SEC and are normally conducted by an investment underwriter.


Semi-finished goods :
Goods used as inputs in the production of other goods, such as partly finished goods. Also, they are goods used in production of final goods. A firm may make and then use intermediate goods, or make and then sell, or buy then use them. In the production process, intermediate goods either become part of the final product, or are changed beyond recognition in the process.

Tangible goods :
Tangible goods are physical products defined by the ability to be touched. They are distinct from intangible goods, which may have value but are not physical entities. Goods that are tangible play a large part in retail, though the purchasing of intangible goods is now widely available through the Internet. They are also distinct from services, such as a spa treatment, since the result of a service is not a tangible product.

Unincorporated company :
 a privately owned business, often owned by one person who has unlimited liability as the business is not legally registered as a company.
 


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