Backflush accounting is a streamlined costing method designed for environments with minimal stock levels. It allocates costs retroactively to simplify accounting operations, especially suitable for Just-In-Time inventory systems.
Basic financial instruments are the underlying tools used in financial operations, including currencies, bonds, stocks, and derivatives. These instruments serve as the backbone of financial transactions and investment strategies.
Defensive securities are stocks and bonds that offer greater stability and relatively safe returns, especially during market downturns.
Fully paid capital stock of a corporation contributed without consideration to the same issuing corporation. Donated stock is generally classified as capital stock and can impact both the financial and operational aspects of the corporation.
An equity instrument is any financial instrument that signifies ownership interest in an entity, such as stocks, options, or warrants.
Ex-dividend is a stock trading term indicating that a stock is trading without the value of its next dividend payment. Dividends are a portion of a company's earnings distributed to shareholders.
Financial assets include stocks, bonds, rights, certificates, bank balances, and other securities, distinguishing themselves from tangible, physical assets like real property.
A contract involving a financial obligation that represents a monetary asset to one party and a financial liability or equity instrument to another party. Examples include stocks, bonds, loans, and derivatives.
In accounting and finance, 'float' refers to various concepts including delayed money processing, publicly held stock proportions, contingency fund allocation, and processes related to financial transactions and securities.
In the context of financial markets, the term 'Floating Supply' refers to the total number of securities, such as municipal bonds or stocks, which are presently available for purchase by investors in the open market.
Flotation (Floatation) Cost refers to the expenses incurred by a company when it issues new stocks or bonds. These costs include underwriting fees, legal fees, registration fees, and other associated expenses.
A certificate issued by a bank or brokerage firm vouching for the authenticity of a person's signature, which may be necessary when stocks, bonds, or other registered securities are transferred from a seller to a buyer.
In commercial and property law, 'holding' refers to property to which one has legal title and of which one is in possession. The term may also refer to the ownership of stocks or shares in corporations.
Ibbotson & Associates is a prominent provider of historical data for various financial investments, renowned for its annual publication 'Stocks, Bonds, Bills & Inflation.' This publication offers critical insights into long-term historical performance across various investment classes.
An investment designed to protect against the loss of purchasing power resulting from inflation, allowing investors to maintain the value of their money over time.
Intangible property represents possessions that hold real value but do not have a physical presence. Examples include stock certificates, bonds, promissory notes, and franchises.
Inventoriable costs refer to the costs that can be included in the valuation of stocks, work in progress, or inventories. These costs include both fixed and variable production costs up to the stage of production reached, but exclude selling and distribution costs.
Investment refers to the purchase of assets such as stocks, bonds, mutual fund shares, real property, collectibles, or annuities, with the expectation of obtaining income, capital gain, or both in the future. Investment tends to be longer term and less risky than speculation.
An investment objective is a financial goal that an investor aims to achieve, guiding them on the type of investment suitable for their needs. For example, an objective focused on capital growth might lead to investing in growth-oriented mutual funds or individual stocks, whereas an income-driven objective could direct investments toward income-oriented mutual funds or stocks.
An investment portfolio is a collection of various assets such as stocks, bonds, real estate, and other investment instruments owned by an individual or an organization to achieve financial goals.
A legal entity that has the power to issue and distribute securities. Issuers include corporations, municipalities, foreign and domestic governments and their agencies, and investment trusts. They are responsible for corporate reporting, paying dividends, and servicing debt.
Justified price refers to the fair market price that an informed buyer is willing to pay for an asset, whether it be in the form of stocks, bonds, commodities, or real estate.
A 'leader' in various contexts can signify a stock group forefronting market trends or a dominant product in its industry.
A 'lemon' refers to a product or investment that performs poorly and fails to meet expectations. This term is commonly used to describe defective cars and underperforming stocks. Lemon laws in several states provide consumers with legal recourse for their underwhelming purchases.
A market order is a buy or sell order to be executed immediately at the current market prices. These orders guarantee execution but do not guarantee a specific price.
Mid-Cap stocks typically have a market capitalization between $1 billion and $5 billion, positioned between small-cap and large-cap stocks. These stocks often offer a blend of stability and growth potential.
A mutual fund is a type of regulated investment company that pools money from shareholders to invest in a diversified portfolio of stocks, bonds, and other securities.
Stock prices that have reached their highest or lowest levels within the past year. This data is often published in newspapers and financial websites to indicate companies experiencing significant price changes.
A new issue refers to a stock or bond being offered to the public for the first time, the distribution of which is covered by Securities and Exchange Commission (SEC) rules. It usually pertains to initial public offerings (IPOs) by previously private companies but can also include additional stock or bond issues by companies that are already public.
Online trading involves the buying and selling of stocks or other securities over the Internet without the need for a physical broker, leading to lower fees and faster transactions.
The OTC Market (Over-the-Counter Market) is a decentralized market where trading of financial instruments such as stocks, bonds, commodities, and derivatives occurs directly between two parties without a central exchange or broker.
Equal to the established value; face amount or stated value of a negotiable instrument, stock, or bond, and not the actual value it would receive on the open market. Bills of exchange, stocks, and similar instruments are at par when they sell for their stated value.
Par value, also known as face value or nominal value, is the minimum price at which shares or other securities are issued and can be redeemed. The par value is typically set by the company at the time of issuance and does not fluctuate.
Passive investment income refers to the earnings derived from investments in which the individual or entity does not actively participate. This includes royalties, rents, dividends, interest, annuities, and gains from the sale of stocks and securities.
In finance, a point has different implications depending on whether it is used in relation to bonds, real estate, commercial lending, or stocks. Understanding these distinctions is crucial for comprehending various financial metrics and transactions.
Primary distribution refers to the sale of a new issue of stocks or bonds, distinguishing it from secondary distribution, which involves previously issued stock. All issuances of bonds are primary distributions, and it is also known as a primary offering. It should not be confused with an initial public offering (IPO), which is a corporation's first distribution of stock to the public.
Redemption refers to the repayment of shares, stocks, debentures, or bonds as specified at the time of issue, often including a fixed redemption date and amount.
Scrip refers to a certificate, written document, or token that ultimately serves as evidence of ownership of stocks, shares, or bonds. It can also be issuance documentation when additional shares are provided to current shareholders, known as a scrip issue.
Financial instruments that represent ownership or debt and provide the holder with a right to receive financial returns or an interest in the profits or assets of an enterprise.
An individual investor who buys small amounts of stock or bonds, often in odd-lot quantities; also called a retail investor.
Small-cap stocks refer to the stocks of publicly traded companies with a market capitalization typically between $300 million and $2 billion. They are considered less well-established but often exhibit faster growth potential compared to mid-cap and large-cap stocks.
In the USA, individuals, businesses, and groups that own stocks in a corporation are known as stockholders. They hold a portion of the corporation's equity.
Annual publication by Ibbotson & Associates that provides long-term historical data on various financial instruments including stocks, bonds, treasury bills, and inflation.
Systemic risk, also known as market risk or systematic risk, refers to the part of a security’s risk that is common to all securities within the same general class and cannot be eliminated by diversification. The measure of systemic risk for individual stocks is the Beta Coefficient.
An underlying security refers to the financial instrument (like stocks, bonds, commodities, or indexes) on which derivatives such as options, futures, or other securities are based. It is the asset that must be delivered when specific financial contracts, like put options or call options, are exercised.
Value investing is an investment philosophy that focuses on buying stocks that are trading at bargain prices based on fundamental analysis, then holding them until they become fully valued.
