Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Standard view
Full view
of .
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1


|Views: 10|Likes:
Published by Shubham Thakur

More info:

Published by: Shubham Thakur on Aug 24, 2011
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less





Accounts Payable:
Indebtedness of a company to its suppliers for goods or services purchasedthat have been purchased and which must be paid for within one year (more typically paid within30-90 days). This shows as a current liability on the company's balance sheet.
Accounts Receivable:
Amounts owed to a company by its customers for goods or servicessupplied to those customers which must be paid for within one year (more typically collectedwithin 30-90 days). This shows as a current asset on the company's balance sheet.
Accredited Investor:
Generally refers to a sophisticated, reasonably wealthy person who caninvest in companies without requiring a prospectus from said company. The exact definition willvary among countries and regulators. In Canada and the US it is an individual whose net worth,or joint net worth with a spouse, exceeds $1,000,000 (excluding one's principal residence); or whose individual income exceeds $200,000/yr.
This usually refers to earnings that result from an acquisition of a business that add tothe earnings per share as opposed to losses that would dilute earnings per share. As a generalrule, an accretive merger or acquisition occurs when the P/E ratio of the acquiring firm is greater than that of the target firm. A "dilutive acquisition" is the opposite of an "accretive acquisition".
Accrual Accounting:
An accounting method which measures the performance of a company byrecognizing financial transactions (purchases and sales) regardless of when the actual cashtransactions occur.
This refers to the reduction in a liability over time, e.g. "amortizing" a loan byregular monthly payments against that loan.
: Angel investors are successful entrepreneurs who are willing to invest some of their gains in new ventures. They typically also act as mentors to the founding entrepreneurs. Whatdifferentiates angels from other investors is that a) they invest their own money (not other  peoples' money which they manage) and b) they have been an entrepreneur themselves.
Annual Reports
: All companies, public or private, are generally required to produce an annualreport for their shareholders. Private companies have more flexibility in this regard and thereport requirement may be waived or diminished as deemed by its owners. Public companies arerequired, by law, to produce annual reports and quarterly reports on their operations AND filethese so that they can be accessed by shareholders as well as the general public (among whichthere may be future shareholders). At a minimum, these reports must contain complete financialstatements (Income, Balance Sheet, Cash Flow) and various management discussions. InCanada, all public company documents can be readily accessed on the internet through SEDAR atwww.sedar.com. The US equivalent is EDGAR, i.e.www.edgar-online.com.
Anti-dilution right:
Such a right gives a shareholder the right to acquire shares in subsequentshare offerings such that the shareholder's percentage ownership does not get diluted (i.e.decreased) as a result of the issuance of more shares.
This entails the buying and selling (of a commodity, stock, derivative, etc) indifferent markets in order to make a profit as a result of a price differential. For example buyinga stock listed on the Toronto Stock Exchange and simultaneously selling the same stock on the NASDAQ if, after taking taking currency exchange into account, the net selling price on NASDAQ is slightly higher than the net buying price on Toronto. Another example occurs whena takeover bid is made for a company and it is trading below the value of the bid. This presentsan arbitrage opportunity for speculators.
Companies' financial statements are sometimes subjected to an
by an independentaccounting firm, meaning that the statements are objectively checked and verified to ensure fair and total disclosure to the stockholders. For public companies, an annual audit is mandatory.Quarterly reports are unaudited. Private firms can do what they want and seldom go to thetrouble of incurring an audit and the associated audit fees.
Balance Sheet:
This is company's accounting statement that shows its assets and liabilities (andnet worth) at one moment in time. It is a snapshot of the financial health of a company. It isgoverned by the equation ASSETS = LIABILITIES + NET WORTH.
Bank of Canada Rate:
This is the central bank's official interest rate. It is like a wholesale ratefor commercial banks on the "overnight" loans. The Bank rate is dictated by government policyand will in turn drive the commercial bank rates, e.g. the prime rate.
Bankruptcy Protection:
When a company becomes insolvent, i.e. it can't pay its bills and meetits financial obligations, it is said to be bankrupt.
When a company becomes insolvent, i.e. it can't pay its bills and meet its financialobligations, it is said to be bankrupt. There are two variations on this definition. A company may be technically bankrupt or it may be legally bankrupt. The former means that the company has, atleast temporarily, run out of cash to pay its bills and is, at the moment, bankrupt. However, itmay recover by raising capital, collecting monies owed to it, or selling off various assets. When acompany does not do this on its own, its creditors may, through the courts, put a companyofficially or legally into bankruptcy.
Bankruptcy Protection:
When a company is bankrupt, it may be allowed to continue with its business operations (as opposed to having it liquidated). It essentially gets a reprieve and sometime to get its affairs in order. During this time, it is "protected" from being pursued by itscreditors so that it can focus on rescuing itself. To do this, a company is said to file for  bankruptcy protection. In the USA, this is referred to as "Chapter 11". A
" may beappointed by the courts during this period.
Basis Point:
A Basis Point refers to one-one hundredth of a unit, such as interest rates or exchange rates.
Bear Market:
This is the term used to refer to a weak, sluggish stock market. Prices and sharevolumes are decreasing in a Bear Market. The opposite to this is a Bull Market.
Blue Chip:
This refers to companies with large market capitalizations ($1B+). It has nothing todo with "chips" of any kind. Many people use it simply to refer to top tier, large cap, firms.
Bond -
A bond is a debt obligation (often in the form of a negotiable "note") by a borrower -typically a government. For example, the Government of Canada may issue a 10 year bond, paying interest at 6%, in denominations of $100. Corporations sometimes issue bonds, too.These are much riskier than bonds backed by government guarantees and are often referred to as"Junk Bonds" and bear much higher rates of interest. Bonds often trade in the market. When prices drop, it means that the effective interest rate is higher - e.g. if a $100 bond paying $6 per year interest, trades at $95, the effective interest rate is 6/95 percent.
Bond Rating:
Government or corporate bonds are rated by companies like the Dominion BondRating Service as to risk. A Double-A rating, for example, would give investors an objectiveassessment as to how capable the issuer is of meeting its repayment obligations. It's a risk assessment.
Book Value:
This is the net value, in an accounting sense, of a company based on actual costsand asset values. For example, if you start an internet company by raising $100K which you thenspend on equipment and legal fees such that you have $50K left in cash, $30K in equipment, andan expense of $20K in legal bills, then the book value is $80K. However, if investors like whatyou are doing, the market value of this company will likely be much higher than the book value.Think of book value as the amount of cash you might be able to realize if you simply shut downa company, sold all the assets and paid all the bills.
In business, this term refers to the process of financing a business by internallygenerated cash flow as opposed to "kickstarting" the company with external investment capital.It means keeping salaries and expenses down while generating customer sales to fuel the growthof the venture.
Bottom Line:
"Bottom Line" is jargon for the very bottom line on the income statement. The bottom line tells you how much money the business is making after tax, i.e. it is Net Profit after Tax.
Bubble Junkie:
Those entrepreneurs that were caught up in the 1999-2000 euphoria surroundinginternet stock deals. They got "addicted" to concepts of easy money, high spending, grow big or go home ideas.
Bull Market:
This is the term used to refer to a strong, healthy stock market. Prices and sharevolumes are increasing in a Bull Market. The opposite to this is a Bear Market. It has nothing todo with "Bull" or "BS", although that may be what causes some stocks to increase unreasonably.
Burn Rate:
This term is particularly applicable to start up companies or to companies which donot yet have substantial revenues. It refers to the monthly rate of consumption of cash. For example, if total monthly operating costs for rent, salaries, etc are $50K, one would say that the

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->