FINANCIAL TERMINOLOGY *BADLA………..carry forward trading *BID…………….

the highest price at which someone is willing to buy a security. *BLUE-CHIP……it refers to the stocks of well known companies who have a stable business and their stocks are actively traded in the markets *BOOK-VALUE…..the value at which an asset is recorded in a balance sheet. BUY—BACK…when a company re-purchases it’s stock or bonds from the market. FORWARD TRADING…..it refers to a trading process whereby a contract is made between the buyer and seller to purchase/sell stock or securities a t a future date but with a rate decided as per the contract. IPO…….it refers to initial public offer..this is the first offer for equity shares made by a company..before making an ipo the shares are held by a few selected members of the company itself. MARKET CAPITALISATION…..it is the total no . of equity shares listed by a company multiplied by the market value of it’s shares in the respective stock exchange. NET WORTH……the value of total assets-total liabilities. SCRIP……..another name for stock B1 GROUP-------it consists of big co shares of high volumes B2 group…consists of low valued and stocks which are rarely traded.

Few formulae

. Current Ratio Current Assets Current Liabilities .

10. Debt Equity Ratio Revenue Statement Ratio 8. d. 3. 11. 7.a Cost of Goods Sold Ratio b. Liquid Ratio Absolute Liquid Ratio Quick Assets Quick Liabilities Absolute Liquid Assets Liquid Liabilities Proprietor's Funds Fixed Assets + Current Assets Funds entitled to fixed rate of interest or dividend Funds not so entitled to fixed rate of interest or dividend Stock Working Capital Long Term Debts Shareholders' Funds OR Long Term Debts Shareholders' Funds + Long Term Debts Gross Profit x 100 Net Sales 4. Proprietary Ratio 5. Gross Profit Ratio Expenses Ratios 9. Capital Gearing Ratio Stock . Operating Expenses Ratio Group of Expenses Ratio Individual Expenses Ratio Operating Cost Ratio Net Profit Ratio Cost of Goods Sold x 100 Net Sales Total Operating Expenses x 100 Net Sales Relevent Group of Expenses x 100 Net Sales Individual Expenses x 100 Net Sales Cost of Goods Sold + Operating Expenses x 100 Net Sales Operating Net Profit x 100 Net Sales OR Net Profit (Before Tax) x 100 .2. c.Working Capital Ratio 6.

23. Return on Capital Employed or Investment 14. of Equity Shares Equity Dividend Paid x 100 Net Profit (After Tax) .Net Sales 12. Funds 16. Period 24. Stock Turnover Ratio Cost of Good Sold Average Stock Combined Ratios 13.Preference Dividend No. Return on Equity Capital 17. Earning Per Share 18. Return on Total Resources 15. Price Earning Ratio Ratio Return on Proprietors' Net Profit Before Tax + Interest x 100 Capital Employed Net Profit Before Interest & Tax x 100 Fixed Assets + Current Assets Net Profit (After Tax) x 100 Proprietors' Funds Net Profit (After Tax) . Debtors' Turnover Ratio 22. Dividend Payout Ratio 19. Interest Coverage 21.Preference Dividend Market Price of Share Earning Per Share Net Profit Before Tax + Interest Fixed Interest Net Credit Sales Average Creditors + Average Bills Payable Net Credit Purchases Average Debtors + Average Bills Receivable Average Debtors + Average Bills Receivable x 12 / 52 / 365 Net Credit Sales Average Creditors + Average Bills Payable x 12 / 52 / 365 Net Credit Purchases 20.Preference Dividend x 100 Equity Share Capital Net Profit (After Tax) . Average Payment Period Creditors' Turnover Ratio Average Collection .

26. 27.25. Fixed Assets Turnover Ratio Fixed Assets to Turnover Ratio Dividend Yield Ratio Sales Fixed Assets Fixed Assets Sales Dividend Per Share x 100 Market Value Per Share .

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