||The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually.
||The basic economic problem, which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
||The process by which large amounts of money illegally obtained from drug trafficking, terrorist activity, or other serious crimes, is given the appearance of having originated from a legitimate source.
||risk that influences a large number of assets.
||A negative change in the rating of a security.
||Refers to oil and gas operations after the production phase and through to the point of sale.
||First In, First Out (FIFO)
||An inventory management and valuation method where the products acquired first are the ones sold first.
||Invest, Then Investigate
||An investment strategy where investors immediately purchase a stock and then do research and due diligence afterwards.
||Unproductive time spent by employees due to factors beyond their control.
||The term used to refer to the actual or physical commodity underlying a futures contract.
||The current price at which a particular commodity can be bought or sold at a specified time and place.
||A commodity traded on the spot market. That is, with the expectation of actual delivery, as opposed to a commodity future that is usually not delivered.
||The market for a cash commodity or actual, as opposed to its futures contract.
- A commodities market in which goods are sold for cash and delivered immediately.
- A futures transaction which will expire in 1 month or less.
||Legal tender or coins that can be used in exchange goods, debt, or services. Sometimes also including the value of assets that can be converted into cash immediately, as reported by a company.
||Cash on Cash Return
A rate of return often used in real estate transactions. The calculation determines "cash income" on "cash invested."
Annual Dollar Income
Total Dollar Investment
||Money paid to stockholders, normally out of the corporation's current earnings or accumulated profits. All dividends must be declared by the board of directors, and are taxable income to the recipients.
||Cash And Cash Equivalents
||An element recorded on the balance sheet, it reports the value of cash and its equivalents. These are assets that are cash or can be converted into cash immediately.
||The price of the purchase and delivery of cash commodities.
||The amount of cash a company generates and uses during a period, calculated by adding noncash charges (such as depreciation) to the net income after taxes. Cash Flow can be used as an indication of a company's financial strength.
It is also sometimes referred to as the "money value" of trades in a stock during a trading day
||A ratio derived from operating cash flow divided by diluted shares outstanding.
||Short-term obligations, usually ninety days or less, that provide a return in the form of interest payments.
||Cash Balance Pension Plan
||An employee pension plan whereby an employer will credit the participant's account with a set percentage of their yearly compensation plus interest charges.
||An estimation of the cash inflows and outflows for a business.
||The "real time" price of a security trading on an exchange.
||The interval between the present date and the maturity date of a bond.
||Annual income (interest or dividends) divided by the current price of the security.
||The amount today that a sum of money in the future is worth, given a specified rate of return.
||A measure of price trend that indicates how a stock is performing relative to other stocks in its industry. It is calculated dividing the price performance of a stock by the price performance of an appropriate index for the same time period.
||A stocks price-earnings ratio divided by the price-earnings ratio for a market measure, such as the S&P 500 index or Wilshire 5000.
- In options, the security that must be delivered if a put or call option is exercised.
- In equities, the common stock that underlies certain types of securities such as warrants and convertible bonds
||Project finance is defined by the The International Project Finance Association (IPFA) as:
The financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cashflow generated by the project.
||A measure of price changes in consumer goods and services such as gasoline, food, and automobiles
||Consumer Price Index (CPI)
||A measure of price changes in consumer goods and services such as gasoline, food, and automobiles
||A debt that someone incurs for the purpose of purchasing a good or service.
||Consumer Confidence Index (CCI)
||A survey of consumer confidence by the Conference Board. It measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
||To charge an asset amount to expense or loss in order to reduce the value of that asset and one's earnings.
||A selling group's compensation in an underwriting (on a per-share or per-bond basis).
||Sales to Cash Flow Ratio
A ratio that indicates whether or not a company's sales are high in comparison to its cash flow.
Sales per Share
Cash Flow per Share
||Return On Sales (ROS)
||A widely used ratio that detects operational efficiency. It is calculated by dividing net income before interest and tax by the sales.
||Selling, General, & Administrative Expenses (SG&A)
||Reported on the Income Statement, it is all the costs associated with selling and the general expenses of running the business.
||A tax that is imposed on the sale price of a retail good or services.
A ratio used to calculate a bank's efficiency. Not all banks calculate the efficiency ratio the same way. We've seen the ratio calculated as all of the following:
For all versions of the ratio, an increase means the company is losing a larger percentage of its income to expenses. If it is getting lower, it is good for the bank and its shareholders.
- non-interest expense divided by total revenue less interest expense
- non-interest expense divided by net interest income before provision for loan losses
- non-interest expense divided into revenue
- operating expenses divided by fee income plus tax equivalent net interest income
||Benefit Cost Ratio - (BCR)
||A ratio attempting to clearly identify the relationship between the cost and benefits of a proposed project.
||Used mostly in the context of mergers and acquisitions, synergy is the idea that the value and performance of two companies combined will be greater than the sum of the separate individual parts.
||A buzzword describing the new, high growth industries that are on the cutting edge of technology and are the driving force of economic growth.
||If it's an earnings press release, the release will discuss the financial results of the company for the recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist you in your research, such as the company's web address.
||Emerging Market Fund
||A mutual fund investing a majority of its assets in the financial markets of a developing country, typically a small market with a short operating history.
||A term used to describe financial assistance programs offered by lending institutions to help companies requiring capital.
||Line of Credit
||An arrangement between a financial institution (usually a bank) and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain.
||The possibility of a loss occurring due to the financial failure to meet contractual debt obligations.
||Credit Default Swap
||A swap designed to transfer the credit exposure of fixed income products between parties.
- The spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating.
- An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security.
- A contractual agreement in which a borrower receives something of value now, with the agreement to repay the lender at some date in the future. Also, the borrowing capacity of an individual or company.
- An accounting entry system that either decreases assets or increases liabilities.
||Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit Derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private investors or governments).
||A fiduciary relationship in which one person, a trustee, holds title to property or assets for the benefit of another person, the beneficiary
||Member-owned financial co-operative. These institutions are created and operated by its members and profits are shared amongst the owners.
||A card allowing someone to make a purchase on borrowed money. Credit cards are one of the most popular forms of payment for consumer goods and services in the United States.
||An assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.
||A slang term meaning that credit deterioration could be compounded by provisions such as rating triggers or financial covenants. These can put pressure on the company's liquidity or its business to a material extent.
||Letter of Credit
||A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.
||A field of economics that studies how the actual decision-making process influences the decisions that are reached.
||A field of finance that proposes psychology-based theories to explain stock market anomalies. Within behavioral finance it is assumed that the information structure and the characteristics of market participants systematically influence their investment decisions as well as market outcomes.
||The stated price per share for which underlying stock may be purchased (for a call) or sold (for a put) by the option holder upon exercise of the option contract.
||An action by a stockholder taking advantage of a privilege offered by a company or other financial institution. This includes warrants, options, and other exotic financial instruments.
||A market in which prices of a certain group of securities are falling or are expected to fall. Although figures can vary, a downturn of 15%-20% or more in multiple indexes (Dow or S&P 500) is considered a bear market.
||A consumer's desire and willingness to pay for a good or service.
||Price Elasticity of Demand
Price Elasticity measures the responsiveness of the quantity demanded of a good to a change in its price. It is calculated as:
% Change in Quantity Demanded
% Change in Price
||The process by which the offer price of an IPO is based on actual demand from institutional investors.
||A provision that voids a bond or loan when the borrower sets aside cash or bonds sufficient enough to service the borrower's debt.
- The act of investors choosing investments that have performed well within another portfolio in anticipation that the trend will continue.
- Relating to bankruptcy proceedings whereby the courts uphold contracts favorable to bankrupt companies, but annul those that are unfavorable.
||A line of credit where the customer pays a commitment fee and is then allowed to take and repay funds at will. It is usually used for operating purposes, fluctuating each month depending on revenues and expenditures
||A short-term investor or day trader who buys pre IPO shares, swiftly spinning them out into public markets for a quick profit.