SmartPros has compiled a glossary of key international accounting terms. If you don't find what you need here, please contact us at firstname.lastname@example.org.
Accounting Standards Board (ASB)
Accounts receivable days
A liquidity metric that provides an indication of how long a company takes to collect its accounts receivable.
A liquidity measure that compares the most liquid current assets to total current liabilities (cash & equivalents + receivables / total current liabilities). It is also known as the Quick ratio.
Insolvency practitioner appointed when a company goes into receivership (work out). A company may go straight to administrative receivership, presided over by an administrative receiver, usually known simply as the receiver. see also Chapter 11
Advance corporation tax (ACT)
An installment of UK Corporation tax, required under UK tax rules. It represents a minimum tax on companies that earn most of their profits overseas.
American Depositary Receipt (ADR)
Certificate issued by U.S. banks to facilitate trading in overseas stocks and shares.
American Stock Exchange
Sometimes abbreviated to Amex, it is owned by the National Association of Securities Dealers and partners on its electronic market, NASDAQ.
Analysts, Stockbrokers and banks give opinions and forecasts (often referred to as estimates) as to future company performance. Broker recommendations and other data are provided by Barra's Global Estimates service. BARRA collate and analyze the brokers' forecasts, and calculate consensus figures from the individual data.
The provision of a guaranteed income for life in return for a lump sum payment - often bought with a pension fund on retirement. Annuity rates are linked to yields on government backed (gilt-edge) securities.
U.S. legislation to prevent monopolies and restraint of trade.
Annual percentage rate - the true interest rate charged on a loan.
Taking advantage of small price differences (of securities or goods) in different markets to make a profit. It involves buying something to sell in another market or at another time.
Traditionally someone who indulges in arbitrage of any sort; now a Wall Street term for a professional investor who specializes in issues during takeovers.
Buying a business and then realizing a profit by selling off the assets separately.
The commission paid by a seller for the postponement of a transaction on a stock exchange when prices for cash delivery are higher than for forward delivery. The opposite is contango.
Balance of payments
A statement of a country's net financial transactions with other countries. Current account measures balance of imports and exports and payments and receipts for services such as shipping, banking and tourism. Capital account measures movements of capital (bank deposits, securities, shares, property).
Bank for International Settlements (BIS)
The central bankers' bank based in Basle, Switzerland.
Bank base rate
Annual interest rate on which British banks calculate lending charges (minimum lending rate).
Usually one hundredth of a percentage point (0.01 per cent), used in quoting movements in interest rates or yields on securities.
Set up by the Bank for International Settlements and based in Basle, the Committee drew up international capital adequacy standards for banks and was once known as the Cooke Committee, after a former chairman.
An investor who expects share prices to fall and thus likely to sell short. More generally, a pessimist about the market outlook. see also bull
A period of falling share prices; a pessimistic state of affairs. see also bull market
Common on the continent of Europe, they are stocks not registered in the name of an owner, who can thus remain anonymous.
Bed and breakfast
Now no longer allowed, it was an overnight UK tax related maneuver intended to establish a tax loss benefit.
Changes in UK stock exchange practices that took place in 1986. They permitted institutions such as banks and insurance companies to own stock exchange subsidiaries, abolished the segregation between brokers and jobbers and ended the system of fixed commissions.
New York Stock Exchange's price display; also used as a synonym for the exchange.
In the UK, the four large clearing banks: Barclays, Midland, Lloyds and National Westminster. In Japan the largest securities houses: Daiwa, Nikko, Nomura and Yamaichi.
The largest accountancy firms: KPMG Peat Marwick, Price Waterhouse Coopers, Ernst & Young, Deloitte & Touche and Arthur Andersen. Individual country arms of these groups may have slightly different names.
see capital adequacy
A stock considered to be of lowest risk with regard to dividend income and capital value.
A certificate of debt issued to raise funds. It normally has a fixed rate of interest and is repayable at a fixed date.
Debt ratings by companies such as Standard & Poor's or Moody's to classify a company's credit risk.
An arrangement where a broker buys all of a new issue of shares and sells them on to investors at a small premium.
Named after James Brady, Brady bonds were issued by the Mexican government as part of its 1990 debt restructuring.
The site in New Hampshire, U.S., of an international conference in 1944 which resulted in the establishment of the World Bank and the International Monetary Fund.
The Brown Book's official title is Development of the Oil and Gas Resources of the United Kingdom; an annual report.
Usually the difference between government spending and revenue and thus the amount that needs to be borrowed. Definition varies between countries. see also public sector borrowing requirement
Similar to a Savings and Loan in the U.S., it is a UK savings institution that specializes in loans for house purchase. Their members own building societies.
An investor who expects share prices to rise. see also bear
A period of rising share prices; an optimistic state of affairs. see also bear market
The German central bank.
The London dollar/sterling foreign exchange market - now outdated but still used by insiders.
The money a company has to invest in buildings, machinery, etc; equity capital is that part of the capital subscribed by shareholders; loan capital is what the company has borrowed; reserves is money that has been retained from earnings.
A measure of the financial strength of a bank or securities firm, usually expressed as a ratio of its capital to its assets. For banks, there is now a worldwide capital adequacy standard, drawn up by the Basle Committee of the Bank for International Settlements. This ratio requires banks to have capital equal to 8 per cent of their assets.
The profit made on the sale of non-trading assets (shares, commodities or land); capital gains tax is payable on the profit.
place where securities such as shares, bonds, stocks are traded and where new securities can be issued. Usually used when referring to the issuing of medium and long-term finance.
Pre-tax profits plus depreciation allowances and other charges.
Certificate of deposit (CD)
Interest-bearing certificate issued by a bank to a depositor - especially common in the U.S.
The major regulatory bank in a country, usually government controlled. The UK central bank is the Bank of England; Germany's is the Bundesbank; in the U.S. it is the Federal Reserve System.
In the US a company can file for protection under Chapter 11 of the bankruptcy laws. The company continues to operate under existing management while working with its creditors to reorganize the business.
Churning occurs when sales agents urge a client to cash in an existing insurance policy after a short time and replace it with another. It is a lucrative practice because agents earn commission on each new policy they sell. It is also illegal.
Normally used to mean the financial community in the City of London.
A member bank of a national check/cheque clearing system. In England the clearing banks are Barclays, Coutts, Lloyds, Midland and National Westminster. In Scotland The Bank of Scotland, Clydesdale Bank and The Royal Bank of Scotland.
Clearing house interbank payment system (Chips)
A computerized payment system for clearing checks in New York.
Clearing house automated payment system (Chaps)
A computerized payment system for clearing cheques in the UK.
Closed-end investment funds
Investment funds with a fixed share capital. Open-ended funds grow or shrink according to investor demand.
Represents common shareholders' investment in a company - includes common stock value, retained earnings, capital surplus, capital stock premium over par value, etc.
see ordinary shares
Short-term securities (typically 90 days in maturity) issued by companies to raise working capital.
Liquidation of a company brought about by a court order, usually as the result of a petition by an unpaid creditor.
A bank jointly owned by a number of other banks. An increasingly unfashionable way for small banks to engage in eurocurrency business.
Consumer Price Index (CPI)
A measure of the change in the cost of consumer goods and services - it is used as an indicator of a nation's inflation rate.
The commission paid by a buyer for the postponement of a transaction on a stock exchange when prices for future delivery are higher than those for cash or spot transactions. The opposite is backwardation.
A bond that can be converted into shares of the issuing company, or its parent.
A currency whose monetary authority allows holders to readily convert it into other currencies, or gold.
A certificate that is detachable from a bond to be exchanged for dividends, interest payments, etc. Also used to mean the rate of interest payable on a fixed-interest security.
see debt ratings
The exchange rate between two currencies (other than those that form a market's principal rates). Thus, in London, the D- Mark/franc rate is a cross rate.
With - cum div means that the buyer of a share is entitled to the next dividend payment. The opposite is ex.
The International Standard Organization, (ISO), three letter currency codes - Click here for a full list of currency codes with their corresponding countries and currencies.
When two parties exchange specific amounts of two different currencies and repay each over time, payments being based on fixed interest rates in each currency.
Total current assets - representing cash and other assets that are reasonably expected to be realized in cash, sold or consumed within one year or one operating cycle. Generally it is the sum of cash and equivalents, receivables, inventories, prepaid expenses and other current assets.
Current cost accounting
A system designed to adjust purchase and cost accounting for changes in prices over time. The more usual convention is historic cost accounting.
Total current liabilities represent creditor or other obligations that the company expects to satisfy within one year. It includes accounts payable, short term debt, notes payable, current portion of long term debt, income taxes payable, dividends payable, other current liabilities.
A measurement of liquidity, calculated by dividing total current assets by total current liabilities.
A long-term corporate bond, bearing fixed interest and often unsecured, issued by a company or government agency; assets may be pledged as security.
Debt / equity ratio
A leverage or gearing ratio of total debt to common stockholders' equity.
Triple A is the top rating for creditworthiness of a borrower as measured in the U.S. by debt rating agencies Moody's and Standard and Poor's. A triple A rating means that there is almost no likelihood of the borrower failing to pay.
This involves raising new money to repay existing debt. It is often done and should not be confused with debt restructuring, a more fundamental process in which a borrower changes the structure of its debts (this usually happens when a borrower is unable to meet it's obligations; this may involve a reorganization of its liabilities, for instance by converting debt into equity. Debt rescheduling refers to a delay in the repayment of a debt, usually applying to both interest and principal payments, and can involve a renegotiation of the terms of the debt.
The periodic write down of an asset to reflect its loss of value through age and use.
A company that specializes in discounting bills of exchange, Treasury bills and short-dated government bonds. The Bank of England uses discount houses to counteract shortages of day-to-day credit.
In the U.S. the rate at which the Federal Reserve will lend short-term funds. Most countries' bank rates are known as the discount rate.
Present value of the sum of future payments after they has been discounted back. The higher the discount rate used, the lower the present value of the future sum.
In the UK, a director found guilty of "unfit" conduct may be disqualified from holding any management position for between 2 and 15 years.
Amount a company distributes as a return to shareholders. Failure to pay is know as passing. UK dividends are usually paid twice a year and U.S. dividends quarterly.
Number of times a company's most recent net dividend to shareholders could be paid out of its annual earnings (profits after tax).
Income drawdown pension plans allow people to defer buying an annuity when they retire and instead draw an income directly from the fund.
Amount of profit available to ordinary shareholders - profit after all operating expenses, interest charges, taxes and dividends on preference stock, but excluding extraordinary items. It is often expressed as earnings per share: the year's earnings divided by the number of ordinary shares. In the UK, do not confuse with profit (In the U.S. earnings is often used interchangeably with profit.)
Economic and monetary union (Emu)
European Union's economic and monetary convergence among member countries, culminating in the introduction of a single currency, the Euro.
Employee stock ownership plan (Esop)
An employee benefit for them to acquire ownership of shares in their company without necessarily laying out personal capital. In the UK, shares are acquired through an employee benefit trust (EBT) and later distributed through an Inland Revenue approved profit sharing trust (PST). Shares may be given or sold to employees.
Combination of life assurance and investment whereby the sum assured is paid at a predetermined date or on death, if earlier.
Equity is the net value of an investment. A house owner's equity is the value of the house minus the unpaid mortgage. Thus negative equity occurs when the house is worth less than the debt on it.
Equity income fund
Fund investing in high-yielding equities in order to pay above average dividends. Capital growth is not a priority.
A bond or note which usually has a final fixed maturity but occasionally is perpetual, issued in an eurocurrency. The buyer of the bond usually holds it outside the country of origin of the currency in which it is denominated.
Currency held by banks, corporations or individuals outside its country of origin: eg eurodollar, eurosterling, etc. The euro part of the name derives from the place where the first market in such currencies (normally dollars) arose.
Without - Ex div means that the buyer of a share is not entitled to the next dividend payment (it appears as xd in share listings); ex rights - not entitled to shares from a forthcoming rights issue; ex cap - not entitled to a scrip issue; ex all - not entitled to any of these. If the entitlement exists, the shares are cum div, cum rights, cum cap, cum all.
Exchange control risk
The risk that a government may hamper or stop the flow of money in and out of a country.
Exchange rate mechanism (ERM)
Pre-cursor to the European Union's single currency by which participating governments committed themselves to maintain the value of their currencies in relation to the European currency unit.
Gains and losses resulting from nonrecurring or non-trading events.
FTSE Actuaries Share Indices: The UK Series
In association with the London Stock Exchange and the UK actuarial profession (the Institute of Actuaries in England and the Faculty of Actuaries in Scotland) - these indices differ in their coverage, but all are calculated according to a common set of published ground rules.
FTSE 100 Index
The FTSE 100 is calculated once a minute during trading hours. It covers the 100 largest companies by market capitalization. Changes to constituents are made once a quarter, according to a narrowly defined formula.
FTSE Mid 250
The 250 companies ranking just below the FTSE 100 in market capitalization - it was introduced in autumn 1992. These mid-sized companies are more directly exposed to the vagaries of the UK economy than the larger, international blue chips in the FTSE 100. The performance of the two indices may thus vary widely.
FTSE Actuaries 350
The FTSE 100 plus the FTSE Mid 250 is principally useful because it is used as the basis for calculating FTSE Actuaries 350 Industry Baskets, which are real-time indices modeled on the FTSE Actuaries All-Share sectors. They allow investors to keep an eye on how individual industry sectors are doing during the day. The definitive end-of-day record of sectoral performance remains the FTSE Actuaries All-Share.
FTSE Actuaries All-Share
Calculated once a day. This series of indices is shown daily on the page that carries the London Stock Market report. This index is elaborately subdivided; its components ought to be correctly distinguished from each other:
FTSE SmallCap contains those FTSE-Actuaries All-Share constituents, which are too small to qualify for the FTSE 350. This index and the mid-250 are calculated with and without investment trusts.
FTSE Actuaries Share Indices: European series
Produced in conjunction with the Institute of Actuaries in England and the Faculty of Actuaries in Scotland. This series of indices covers stocks from all European countries, as well as a subset of stocks from the 11 initial members of the euro-zone. It is subdivided into the same industry sectors and subsectors as the FT/S&P Actuaries World Indices. The most important of these indices are the FTSE Eurotop 300 and FTSE Eurotop 100. These are calculated in Ecu (euros from January 1999). Close, change, yield and total return are shown on Euro Prices page, along with the constituents of the FTSE Eurotop 300.
FTSE-Actuaries Fixed Interest Indices
In association with the UK actuarial profession (the Institute of Actuaries in England and the Faculty of Actuaries in Scotland). Calculated once a day. These cover UK government bonds (gilts) and other UK fixed interest stocks.
FT/S&P Actuaries World Indices (FT/S&P)
Compiled by FTSE International in conjunction with the Institute of Actuaries in England and the Faculty of Actuaries in Scotland. Owned by FTSE International Ltd, Goldman, Sachs & Co and Standard & Poor's. Calculated once a day. This series of indices is shown daily in the table of the same name that normally appears on the World Stock Markets statistics Page. The indices are published in US dollars, sterling, yen and D-Marks (euros from January 1999) for the world, 15 regions and 29 constituent countries.
Financial Times Ordinary Share Index (FT Index)
Thirty constituents - calculated once a minute during London Stock Exchange trading hours. The constituent companies change from time to time.
Measure of the degree to which a business is funded by debt rather than shareholders' equity. The U.S. expression for the same thing is leverage. A highly geared company carries a lot of debt.
Securities with interest and repayment guaranteed by the UK government. Often used as a synonym for high quality - the securities are known as gilts, the market is the gilt market.
The UK government's equivalent of zero-coupon bonds - the return comes as capital gain.
In the U.S., payment by a takeover target to a potential bidder, usually to buy back acquired shares at a premium - in return for the predator not pursuing the bid.
Unofficial trading of securities before their formal public issue.
Gross domestic product (GDP)
Total value of all goods and services produced domestically each year by a country. It equals gross national product minus income from abroad. Most countries use this definition - U.S. official statistics use gross national product.
Gross national product (GNP)
Total value of goods and services produced each year by a country. Real growth in GNP measures the increase in output after subtracting the effect of inflation.
Insuring against price fluctuations by taking equal and opposite positions in two different markets, eg in futures and cash markets.
Company whose main assets are its shareholdings (usually controlling) in other companies.
Index of leading economic indicators
Compiled by the U.S. Commerce Department and is a composite of 12 economic measurements.
UK tax charged on the passing of wealth from one person to another, either during life or at death.
Insider dealing or trading
Illegal exploitation of confidential information in order to make a profit, or avoid a loss, on market transactions.
Occurs when individuals or businesses do not have enough resources to cover their debts, or cannot pay their debts when they are due.
Assets that do not have a physical existence - include goodwill/cost in excess of net assets purchased, patents, copyrights, trademarks, formulae, capitalized advertising costs etc.
Large financial institution, such as an insurance company, pension fund, unit trust or investment trust.
Specialized broker who secures insurance business and places it with recognized underwriters.
A current asset - includes the value of items acquired or manufactured for resale, also known as stocks.
A company that invests a fixed amount of money in a variety of stocks and shares as a way of spreading risk. Investment trusts have fixed capital, unlike unit trusts, which can create or redeem units in response to demand.
Investors' Compensation Scheme
Statutory scheme operated by the UK Securities and Investment Board to give individual investors up to £48,000 protection if an authorised investment business collapses.
Foreign income from sources other than the movement of goods - it includes earnings from tourism, banking, shipping, insurance and investment.
Co-operation on a project between two or more parties.
High-yield bonds that are below investment grade (BAA by Moody's or triple B by Standard & Poor's) which are often used to fund takeovers and buy-outs.
The acquisition of a company by utilizing the company's assets as collateral for the borrowing. The loans are repaid from the company's cash flow or by selling its assets. see also management buy-out
Libid and Libor
Libid is the London interbank bid rate, the rate that a bank is willing to pay for funds in the international interbank market; Libor is the London interbank offered rate, the rate at which banks offer to lend funds in this market. The average of the two is Limean. In practice, Libor is much the most frequently quoted.
London International Financial Futures and Options Exchange.
Process that brings a company's existence to an end after distributing its assets. A liquidator is the insolvency practitioner who winds up a company.
The proportion of cash in a company's assets; also assets that are easily capable of being turned into cash.
Part of a company's capital made up of loans from outside the company. Loan stock is stock issued against loans, either unsecured loan stock or debenture stock; the latter is secured by a charge on assets.
The rate at which the Bundesbank, the German central bank, lends funds to banks as short-term credit. It is normally at least 1 percentage point above the discount rate and is regarded as an important international indicator.
Long term debt
Represents all interest-bearing financial obligations, excluding amounts due within one year.
Purchase of a troubled company by investors who offer a new set of managers.
The purchase of a company by its managers, usually with outside backing.
Value at current market prices of a company's equity capital. It equals the share price times the number of shares outstanding.
Specialized bank offering investment services, corporate advice, trade and project finance, exchange rate dealing, etc to clients worldwide. It also acts as an issuing house for stocks and bonds, and advises companies involved in mergers.
Minimum lending rate
Minimum rate of interest at which the Bank of England was willing to lend to the money market; discontinued in 1981, but occasionally reused in moments of crisis.
Monetary compensatory amounts (MCAs)
Part of a complicated system of levies and subsidies designed to smooth currency-related distortions in EC cross-border farm trade.
Total amount of money in an economy, as described by definitions M0, M2, M4, M4c, M5. The most widely used are: M0, the wide monetary base, which consists of notes and coins in circulation outside of a central Bank (such as the Bank of England), plus bankers' operational deposits within the bank; and M4, which consists of the private sector's holdings of notes and coins and all sterling deposits at banks and savings and loans (building societies). In Germany M3 includes cash in circulation, current accounts and short-term deposits.
U.S. name for unit trust.
Wealthy individual whose capital backs the Lloyd's of London insurance market.
The National Association of Securities Dealers Automated Quotation system, operated in the U.S. by the National Association of Securities Dealers. A computerized system for providing price quotes for securities in the U.S.
Return that doesn't take account of the effect of inflation.
Open-ended investment companies, a substitute for unit trusts with a single price for buying and selling.
In the UK a civil servant and also a court officer, attached to the Insolvency Service, which is an executive agency of the Department of Trade and Industry. The official receiver is first on the scene in any bankruptcy or compulsory liquidation.
Financial centre free of many taxes and constraints, such as the Bahamas, Bahrain, and the Cayman Islands.
Agreement entitling the holder to buy (call) or sell (put) shares or commodities, within a given time and at a given price, from or to the other party to the agreement.
Ranked after preference shares and debentures, for dividend payments and liquidation preference; the securities that usually confer ownership of the company. In the U.S. they are known as common stock.
Over-the-counter market (OTC)
Trading in shares away from organized exchanges; usually carried out over the telephone or via a computer network.
Shares for which the buyer pays only part of the issue price initially, paying for the rest at predetermined dates, on the last of which they become fully paid.
Personal equity plan (PEP)
Replaced in 1999 by individual savings accounts, a vehicle for UK individuals to invest a certain sum in equities each year without attracting income tax or capital gains tax.
The right of existing shareholders to buy additional shares in a company through a new issue, before it is offered to the public.
Preference shares/preferred stock
Fixed dividend shares that rank above ordinary shares if a company is liquidated (wound up).
A share's price divided by its last published earnings per share. It is used as a measure of comparing a company's share value with others and as a valuation metric.
Batch of deals involving a number of different shares carried out simultaneously by a single stock market trader, who may either be acting for a client or have taken the action on their own account.
Public sector borrowing requirement (PSBR)
In the UK the PSBR defines the amount that the public sector as a whole has to borrow in any financial year.
Purchasing power parity
Method of valuation implying that the correct exchange rate between two currencies is the one that equalizes the price of the same traded item in both countries.
Laying of a primary risk to a secondary insurer.
A risk a purchaser of a bond needs to take into consideration when calculating the yield to maturity on the bond. The calculation assumes that coupon repayments are reinvested at the same rate as the yield to maturity calculated at the time of purchase. The risk is that over the life of the bond interest rates fall and the coupon payments are reinvested at less than the yield to maturity at the time of purchase. Reinvestment risk is one of several types of risk associated with bonds. Others are interest rate risk, credit risk, call risk, inflation risk, currency risk, and event risk.
Categories of liquid assets of a bank or company consisting mainly of retained profits.
Internationally acceptable currency which is held by other countries as part of their central reserves.
Proportion of deposits that a bank must by law keep in cash or place with the central bank.
Banking services primarily for individuals and small businesses; wholesale or corporate banking deals with institutions and commercial concerns.
Retail price index (RPI)
Measure of the level of consumer prices for goods. The inflation rate in the UK is the RPI's percentage increase usually compared with the same month the previous year. In the U.S. the same rate is the consumer price index.
Offer of shares to existing shareholders usually at a discount to market price.
Discount rates used for risk assets, such as equities, are higher than those used for risk-free assets, such as Treasuries or gilts. Equity risk premium is the difference.
Bond issued by a foreign borrower in Japan; denominated in yen, it can be bought by non-residents of Japan.
Savings and loan (S&L)
U.S. equivalent of a building society, providing funds for house purchase. Otherwise known as a thrift.
Issue of UK shares to shareholders without payment; a way for a company to transfer money from reserves to permanent capital. Also known as capitalisation issue or bonus issue.
The buying and selling of existing stocks, shares, bonds, etc. New securities are placed in the primary market.
Securities and Exchange Commission (SEC)
Official U.S. body which regulates the securities industry.
Securities and Futures Authority (SFA)
Regulatory authority for securities and futures brokers in the UK. It handles complaints against stockbrokers. It was formed through a merger in 1991 of the Securities Association and the Association of Futures Brokers and Dealers.
Securities and Investment Board (SIB)
UK regulatory body set up in 1986 to oversee the investment business.
Average price at the close of the days trading. It is used to set the next days fluctuation limits and to determine margin calls on futures contracts. At the London Metal Exchange the settlement is the morning official offer price.
The data provided under this heading in Company Briefs shows common shares outstanding, ie, the number of shares outstanding at the company's year end.
SIC codes and definitions
The 1987 US Standard Industrial Classification (SIC) system provides a standardized means of classifying business activities.
Market in goods or securities for immediate delivery.
Special Drawing Right (SDR)
International reserve asset created by the IMF in 1969 and used by it for bookkeeping purposes. The SDR currency basket consists of the five weighted currencies of the G5 countries (dollar, D-Mark, pound, French franc and yen).
Someone who subscribes for a new issue in the hope of selling at a profit immediately dealing starts.
Division of shares into a larger number of shares of lower unit value. Proportional ownership of the shares remains the same.
Order for a broker to buy or sell shares or commodities when the price reaches a certain level.
Exchange of a stream of payments over time agreed by two counter parties; normally used to transform market exposure from one interest rate base to another or one currency to another. see also currency swap
UK government bond used to control the gilt market. Supplies may be turned on or off, hence the name; only a proportion is issued initially, the remainder being fed into the market by the government broker.
see savings and loan
Note issued by governments to finance short-term expenditure; in the UK normally for 91 days, in the US for 3 or 6 months. In the U.S. auctions of these bonds take place weekly (the weekly tender), their yields giving clues to interest rate trends.
Trustee savings bank
Bank managed by a body of trustees but which has most of the features of a clearing bank. Note: the former Trustee Savings Banks were transformed into TSB Group, now merged with Lloyds Bank as Lloyds TSB.
Principal who underwrites an insurance policy; also someone who guarantees to buy up shares or bonds from an issue that are not taken up by the public.
Fund of stocks and shares held by a trustee for the benefit of subscribing investors; an easy means of obtaining a spread of investments. The British equivalent of a mutual fund.
Liquidation initiated by a company, not one imposed by a court.
Financial district of New York in lower Manhattan; the American equivalent of the City of London; used as a synonym for the U.S. financial markets.
Someone who rescues a takeover target from an unwanted bidder.
Winding up order
Order made by a court for a company to be placed in compulsory liquidation.
Efforts by companies to put a favourable gloss on their accounts, sometimes by raising short-term funds.
Tax deducted from dividends in the US, Canada and other countries, when these are paid to non-residents. It can be reclaimed under certain conditions.
An abbreviation commonly used to signify that a share is trading ex-dividend.
An abbreviation commonly used to signify that a share is trading without rights attached.
Method for setting a budget in which all spending must be justified each year, not just amounts in excess of the previous year.
A bond that pays no interest and matures at face value. It provides a return to investors by being sold at a deep discount. Known also as an accrual bond, a deferred interest bond and a strip.
In stock markets, a price which is the same as that for the previous transaction, but less than that of the trade before that. Also known as a zero-downtick.
In stock markets, a price which is the same as that for the previous transaction, but greater than that of the trade before that. Also known as a zero-uptick.