Accounts payable
Amounts owing on an open account to creditors for goods and services.

 

Accounts receivable
Money owed to a business for merchandise or services sold on an open account.

 

Amortization
Paying off an interest bearing liability by gradual reduction through a series of installments comprising both principal and interest components, as opposed to paying it off by a simple lump-sum payment.

 

Analysts
Individuals working for a research or pokerage firm. They make forecasts about companies' future earnings, revenues, growth rates, and stock price (price target). They also make recommendations regarding buying, selling, or holding a particular stock.

 

Ask price
Price at which a security or commodity is offered for sale on an exchange.

 

Assets
Anything having commercial or exchange value that is owned by a business, institution or individual.

 

Audit
Professional examination and verification of a company's accounting documents and supporting data for the purpose of rendering an opinion as to their fairness, consistency and conformity with Generally Accepted Accounting Principles.

 

Balance sheet
Financial report showing the status of a company's assets, liabilities and owners' equity on a given date, usually the close of a month.

 

Basel II
Revised capital framework of the Basel Committee which has replaced the former Basel I-regulations especially on the calculation of the regulatory risk position.

 

Bid price
Price a prospective buyer is ready to pay.

 

Bond
Any interest-bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity. Bondholders have no corporate ownership privileges, as stockholders do.

 

Book value
Value at which an asset is carried on a balance sheet.Net asset value of a company's securities.

 

Bursa Malaysia
The Kuala Lumpur Stock Exchange (MYX)

 

Buy Recommendation
An analyst recommendation to purchase a stock, generally indicating that the stock should outperform other comparable stocks.

 

Buy-out
Purchase (in full or in part) of a company or specific corporate activities.

 

Capital adequacy ratio
Key figure for banks expressing in % the ratio between their Capital according to Basel II and their Regulatory risk position comprised of credit risks, market risks and operational risks. The minimum total capital ratio to be complied with is 8 %.

 

Cash
Asset account on a balance sheet representing paper currency and coins, negotiable money orders and cheques and bank balances.

 

Cash equivalents
Highly liquid security with a known market value and a maturity, when acquired, of less than three months.

 

Cash flow
Total changes that affect the cash account during an accounting period.

 

Cash management
Refers to the management of liquid assets in dollars, euro and other currencies for companies and financial institutions to optimize financial transactions.

 

Close price
The price of the final trade of a security at the end of a trading day.

 

Coaching
Personalized, tailored developmental intervention aimed at improving an employee’s performance (e.g. management competence, communication skills) as a rule with the help of a coach.

 

Commitment
A firm’s employees have commitment when they identify with their company, its goals and values, are willing to work hard for it and prefer to stay in its employment.

 

Common Stock
Shares held in a public company that give holders of those shares voting rights and the right to receive dividends when they are declared by the board of directors. In general, there are two types of shares, common and preferred stock. Common stock holders share in the success when a company profits; however, they are also at risk if the company falters. In the event of liquidation of the corporation, common stock has lower priority than preferred stock and bonds (debt).

 

Company
A corporation or a limited partnership with publicly traded stock.

 

Compliance
Entirety of measures adopted to ensure that relevant laws, rules and internal regulations are adhered to and to prevent legal or regulatory sanctions as well as financial or reputational damage.

 

Consolidated statements
Financial statement that pings together all assets, liabilities, and operating accounts of a parent company and its subsidiaries.

 

Cost basis
Original price of an asset, used in determining capital gains.

 

Cost of sales
Figure representing the cost of buying raw materials and producing finished goods.

 

Current assets
Cash, accounts receivable, inventory and other assets that are likely to be converted into cash, sold, exchanged or expensed in the normal course of business, usually within a year.

 

Current liabilities
Debts or other obligations coming due within a year.

 

Debt
Securities such as bonds, notes, mortgages and other forms of paper that indicate the intent to repay an amount owed. A cash payment of interest and/or principal is made at a later date in time. This is in contrast to an equity investment where there is an exchange of shares of common stock, or ownership of the company.

 

Debt-to-equity ratio
Usually, long-term debt divided by shareholder's equity.

 

Deferred income taxes
The estimated future tax obligations that usually arise when different depreciation methods are used for financial statements and tax purposes. It is also an add-back to the statement of cash flows. Deferred income taxes include accumulated tax deferrals due to accelerated depreciation and investment credit.

 

Depreciation
Charges against earnings to write off the cost, less salvage value, of an asset over its estimated useful life.

 

Dividend
Distribution of earnings to shareholders, prorated by class of security and paid in the form of money, stock or, rarely, company products or property. The amount is decided by the Board of Directors and is paid when declared by the Board. Dividends must be declared as income in the year they are received.

 

Dividend yield
Annual percentage of return earned by an investor on a common or preferred stock. The yield is determined by dividing the amount of the dividends per share by the current market price per share of the stock. The dividend yields of stocks are listed in the stock tables of most daily newspapers.

 

Downgrades
When an analyst reduces a recommendation for a stock. Examples include changing a "buy" recommendation to a "hold," a hold to a "sell".

 

Earnings
The net income or profit for a company. This amount consists of revenues minus all costs (including taxes).

 

Earnings Estimate Date
The date on which an analyst makes an annual or quarterly earnings estimate for a stock.

 

Earnings Estimates (Forecasts)
An analyst's prediction about a particular company's earnings for a future quarter or year. It is an estimate whether a company will increase, decrease, or remain flat in its operating income and overall profitability.

 

Earnings per Share (EPS)
The profit per share for a company. This amount is equal to earnings (net income) divided by the number of shares outstanding for that company.

 

EBITDA
Earnings before interest, taxes, depreciation, and amortization.

 

Enterprise Value (EV)
The total market capitalization of a company plus any outstanding debt. This is the cost of acquisition should one entity merge with or acquire another and assume the outstanding debt.

 

Equity
Total assets minus total liabilities.

 

Equity Capital Markets
Primarily, activities connected with a company’s IPO or the placement of new shares. It also covers the privatization of state-owned companies.

 

Exchange
A registered marketplace where securities are traded. Securities exchanges include the New York Stock Exchange, the American Stock Exchange, and regional exchanges such as the Philadelphia Stock Exchange and the Pacific Stock Exchange. Stocks trading on an exchange are referred to as listed securities.

 

Fair value
Amount at which assets or liabilities would be exchanged between knowledgeable, willing and independent counterparties.

 

Fiscal Quarter
A 12-, 13-, or 14-week (three-month) period designated as a quarter (of a year) by a particular company, used for financial reporting and tax purposes.

 

Fiscal Year
A 52- or 53-week (12-month) period designated as a year by a particular company, used for financial reporting and tax purposes.

 

Fixed assets
Tangible property used in the operations of a business, but not expected to be consumed or converted into cash in the ordinary course of events. Fixed assets are normally represented on the balance sheet at their net depreciated value.

 

Forecast
A prediction about the future, concerning a company's earnings, revenues, stock prices, or other financial data.

 

Fully diluted EPS (earnings per share)
Figure showing the earnings per common share after assuming the exercise of warrants and stock options, and the conversion of convertible bonds and preferred stock (all potentially dilutive securities). Actually, it is more analytically correct to define the term as the smallest earnings per common share figure that can be obtained by computing earnings per share for all possible combinations of assumed exercise or conversion.

 

Futures
Forward contracts standardized with respect to quantity, quality and delivery date, in which an instrument traded on the money, capital, precious metal or foreign exchange markets, is to be delivered or taken receipt of at an agreed price at a certain future time. Cash settlement is often stipulated for such contracts (e.g. futures based on equity indices) to meet the obligation (instead of delivery or receipt of securities).

 

General business risk
Risk arising from changes in general business conditions, such as market environment, client behavior and technological progress. These factors can affect our earnings if we are unable to adjust quickly to changes in them.

 

Goodwill
The excess of acquisition cost over net asset value. Usually represents the value given to a well-respected business name, to the quality of its client portfolio and other such intangible factors.

 

Gross margin (gross profit)
Net sales less the cost of goods sold.

 

Growth rate
Percentage rate at which stocks or earnings are growing. Individual companies try to establish a rate at which their earnings grow over time. Firms with long-term earnings growth rates of over 15% are considered fast-growing companies. Analysts also apply the term growth rate to specific financial aspects of a company's operations, such as dividends, sales, assets and market share. Analysts use growth rates to compare one company to another within the same industry.

 

Hold Recommendation
The recommendation that investors maintain their current position in a stock. This generally indicates that the stock should perform similarly to other comparable stocks.

 

Income statement (profit and loss statement, statement of operations)
Summary of the revenues, costs and expenses of a company during an accounting period.

 

Intangible assets
Right or nonphysical resource that is presumed to represent an advantage to the firm's position in the marketplace. Such assets include copyrights, patents, trademarks, goodwill, computer programs, capitalized advertising costs, organization costs, licences, leases, franchises, exploration permits and import and export permits.

 

Interest
The price paid for the use of credit or money. It may be expressed either in money terms or as a rate of payment.

 

Inventory
Value of a firm's raw materials, work in process, supplies used in operations and finished goods. Since inventory value changes with price fluctuations, it is important to know the method of valuation. There are a number of valuation methods; the most widely used are first in, first out (FIFO) and last in, first out (LIFO). Financial statements normally indicate the basis of inventory valuation, generally the lower figure of either cost price or current market price, which precludes potentially overstated earnings and assets as the results of sharp increases in the price of raw materials.

 

Investor Relations
Investor relations describes the systematic and continuous two-way communication between companies and both current and potential providers of capital. Information is supplied on major corporate events, financial results, business strategy and the capital market’s expectations of management. One objective of investor relations activities is to ensure that a company’s equity is appropriately valued by the market.

 

Liabilities
Claim on the assets of a company - excluding ownership equity. Characteristics: (1) it represents a transfer of assets or services at a specified or determinable date; (2) the firm has little or no discretion to avoid the transfer; (3) the event causing the obligation has already occurred.

 

Liquid asset
Cash or easily convertible into cash. In a corporation's financial statements, liquid assets are cash, marketable securities and accounts receivable.

 

Liquidity risk
Risk to earnings and capital arising from a bank’s potential inability to meet matured obligations without incurring unacceptably high losses.

 

Long-term debt
Liability due in a year or more. Normally, interest is paid periodically over the term of the loan, and the principal amount is payable as notes or bonds mature.

 

Low
Lowest trading price for a security that day.

 

Market Capitalization (Market Cap)
The market value of all the stock in a company. This equals the price per share, multiplied by the number of shares outstanding.

 

Market value
The price at which buyers and sellers trade similar items in an open marketplace. In the absence of a market price, it is the estimated highest price a buyer would be warranted in paying and a seller justified in accepting, provided both parties were fully informed and acted intelligently and voluntarily.

 

Marketable securities
Securities that are easily sold. On a corporation's balance sheet, they are assets that can be readily converted into cash - for example, government securities, banker's acceptances and commercial paper. In keeping with conservative accounting practice, these are carried at cost or market value, whichever is lower.

 

Net earnings
Difference between total sales and total costs and expenses after income taxes. Total costs comprise cost of goods sold including depreciation; total expenses comprise selling, general and administrative expenses. Net income after taxes is the bottom line referred to in popular terms. It is out of this figure that dividends are normally paid.

 

Net sales
Gross sales less returns and allowances, freight out and cash discounts allowed. Cash discounts allowed is seen less frequently than in past years, since it has become conventional to report as net sales the amount finally received from the customer. Returns are merchandise returned for credit; allowances are deductions allowed by the seller for merchandise not received or received in damaged condition; freight out is shipping expense passed on to the customer.

 

Net worth
Amount by which assets exceed liabilities. For a corporation, net worth is also known as stockholder's equity or net assets.

 

Asset not expected to be converted into cash, sold or exchanged within the normal operating cycle of the firm, usually one year. Examples of noncurrent assets include fixed assets, leasehold improvements and intangible assets.

 

Operating income (or loss)
The difference between the revenues of a business and the related costs and expenses, excluding income derived from sources other than its regular activities and before income deductions.

 

P/E Ratio
Shows the relationship between a stock's price and a company's earnings. The P/E ratio is calculated by dividing the current price of the stock by the earnings per share (either the company's trailing annual earnings per share or the company's expected earnings per share). This is used to compare the relative value of different stocks. The P/E ratio is also called the multiple.

 

Portfolio
A group of securities or stocks held together for investment purposes.

 

Preferred stock
Class of capital stock that pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets. Preferred stock does not ordinarily carry voting rights.

 

Price Target
A stock price that an analyst forecasts will be reached by some future date.

 

Profit
See earnings.

 

Recommend Date
The date on which an analyst makes a "buy," "sell," or "hold" recommendation for a stock.

 

Recommendation
Analyst statement regarding the future prospects of a particular stock's prices.

 

Retained earnings
Net profits kept to accumulate in a business after dividends are paid. Retained earnings plus the total of all the capital accounts represent the net worth of a firm.

 

Return
The increase in value of a stock or portfolio over a specified period of time.

 

Return on assets
The latest 12 months' net income divided by the total assets from the most recent quarter.

 

Return on Buy-Rated Stocks
The performance or return of portfolios created from an analyst's "strong buy" and "buy" recommendations, measured over periods of one, two, and three years.

 

Return on capital
Latest twelve months' net income divided by the most recent quarter invested capital (long-term debt plus common stock equity plus preferred equity).

 

Return on equity
Amount, expressed as a percentage, earned on a company's common stock investment for a given period. It is calculated by dividing common stock equity (net worth) at the beginning of the accounting period into net income for the period after preferred stock dividends but before common stock dividends. Return on equity tells common shareholders how their money is being employed. Comparing percentages for current and prior periods reveals trends, and comparison with industry composites reveals how well a company is holding its own against its competitors.

 

Revenues
The dollar amount of sales generated by a company.

 

Security
Instrument that signifies an ownership position in a corporation (a stock), a creditor relationship with a corporation or a government body (a bond) or rights to ownership such as those represented by an option, subscription right and subscription warrant.

 

Sell Recommendation
An analyst recommendation to sell a stock, generally indicating that the stock should underperform other comparable stocks.

 

Share
Unit of equity ownership in a corporation. This ownership is represented by a stock certificate, which names the company and the shareowner. The number of shares a corporation is authorized to issue is detailed in its corporate charter. Corporations usually do not issue the full number of authorized shares.

 

Shareholder value
Management concept that focuses strategic and operational decision-making on the steady growth of a company’s value. The guiding principle is that only returns above the cost of capital add value for shareholders.

 

Shares Outstanding
The number of shares issued by a company, net of any shares repurchased by the company.

 

Short-term debt
All debt obligations coming due within one year; shown on a balance sheet as current liabilities.

 

Special items
Gain or loss resulting from circumstances that are, by their nature, uncharacteristic of the corporation's normal evolution. Nonrecurring occurrence that must be explained to shareholders in an annual or quarterly report. Earnings are usually reported before and after taking into account the effects of special items.

 

Statement of cash flow
Analysis of cash flow included as part of the financial statements in annual reports of publicly held companies. The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents and peaks the analysis down according to operating, investing and financing activities. As an analytical tool, the statement of cash flow reveals healthy or unhealthy trends and makes it possible to predict future cash requirements. It also shows how actual cash flow measured up to estimates and permits comparisons with other companies.

 

Strong Buy (Recommendation)
A strong analyst recommendation to purchase a stock, generally indicating that the stock should outperform other comparable stocks by a wide margin.

 

Strong Sell (Recommendation)
A strong analyst recommendation to sell a stock, generally indicating that the stock should underperform other comparable stocks by a wide margin.

 

Sustainability
Denotes the interplay of economy, ecology and social responsibility with the objective of sustainably advancing the basis for human life while preparing it for the future.

 

Takaful
Islamic insurance structured as charitable collective pool of funds based on the idea of mutual assistance,

 

Tax
A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.

 

Treasury stock
Stock reacquired by the issuing company and available for retirement or resale. It is issued but not outstanding. It cannot be voted and it pays or accrues no dividends. It is not included in any of the ratios measuring values per common shares.

 

Trend
Long-term price or trading volume movements either up, down or sideways, which characterize a particular market, commodity or security. Also applies to interest rates and yields.

 

Upgrade
When an analyst improves a recommendation for a stock. Examples include changing a "hold" recommendation to a "buy" or a "sell" to a "hold" recommendation.

 

Volume
The number of shares traded for a particular stock or exchange.

 

Working capital
Funds invested in a company's cash, accounts receivable, inventory and other current assets. This figure enables one to evaluate a company's ability to repay its short-term debt.

 

Yields
Return on an investor's capital investment.