Private equity is the term which refers to money (capital) invested directly into private companies (those which are not listed on any stock exchange) by individual investors or funds. Private equity is often used to buy out public companies (those listed on stock exchanged) and delist them. Perhaps in a management buyout situation. Typically capital [...]
The simple definition of real estate is “ A piece of land, including the air above it and the ground below it, and any buildings or structures on it.” The legal definition, at least in those countries such as the which are or were part of the British Empire or Commonwealth (and thus whose legal [...]
The terms “liquidity” or “liquid market” or “liquid asset” refer to the ease – or otherwise – with which an investment or asset can be sold. A liquid asset can be sold quickly, with minimal loss of value and typically this could refer to a stock or share traded on a major market. The essential [...]
Accounting is viewed by most non accountants as a complicated and highly technical matter, and this is a view that is encouranged by the accountancy profession. But the truth is that it is based on a very simple principal which once understood allows business owners and managers to understand the financial state of their business without [...]
In theory this is a simple concept. If Company A has earnings of £1 million and has 5 million shares in issue then the earning per share is £0.20. However there are some complicating factors. The fact is that companies have great flexibility in how they choose to report earnings per share. There are numerous [...]
Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a given stock. Dividend yield is calculated by dividing the annual dividend paid per share by [...]
This is the price of a share in a company divided by the dividend paid on it. Unlike the P/E ratio this is a matter or fact and cannot be fudged by accounting sleight-of-hand which can massage the “earnings” quite substantially. So if a share is trading at £20 and last year the company paid £1 [...]
This is in fact a fairly simple one. P/E Ratio is a company’s share price divided by the earnings per share. So, if a company’s shares are currently trading at £10 a share and if the earnings for the previous 12 months are £0.85 the share has a P/E ratio of 11.76. The P/E ratio [...]
The Bank for International Settlements is an organisation that fosters co-operation between central banks and other agencies in pursuit of monetary and financial stability. It provides facilities for international financial operations and acts as agent or trustee in international financial settlements. Its banking services are available exclusively to central banks (such as the Bank of [...]
This is a spread which is rendered unprofitable because of unreasonably high agents’ commissions. See also: Spread Bid-Offer Spread
The “spread” is the difference between the purchase price and the share price of a security (stock, share etc). You will find it mentioned in many reports and quotes in the newspapers on on financial websites. See Bid-offer Spread
This is the difference between the higest buying price (offer price) that a buyer is prepared to offer and the lowest selling price (bid price) that the seller is prepared to accept.
If you can convert an asset to cash easily and quickly, with little or no loss of value, the asset is said to have liquidity. For example if you have shares or bonds in a well known company, such as Ford, GE or Microsoft, you could sell these easily within a few hours just by [...]
The generally accepted definition is that Cash Investments are short-term obligations, usually ninety days or less, that provide a return in the form of interest payments. Examples are money-market funds and short-term Certificate of Deposit. Putting your cash on deposit in a bank or similar institution is not considered a cash investment but a cash [...]
When a company or a government needs to raise cash, it may opt to borrow the money it needs from the public through the selling of bonds. The company or government department (the “issuer”) of the bond outlines how much money it would like to borrow and specifies a length of time it wants the [...]
The British Treasury has set up an independent review to examine the operations of offshore financial centres and their effect on the UK economy. The review will look at the current and future risks posed by the current economic crisis to the financial business of British Crown Dependencies and Overseas Territories including Jersey, Guernsey, the [...]
HMRC have published the long delayed survey which they commissioned on Save As You Earn (SAYE) and Share Incentive Plans (SIP), which considers whether the schemes have met their policy objectives. The survey on SIPs was due in 2005. While the report provides some useful statistics, it is disappointing that HMRC have failed to address [...]
Investors have been warned to beware of fraudsters targeting former customers of rogue stockbroker Pacific Continental Securities. The UK Financial Services Authority closed down Pacific Continental Securities in June of 2007. The company had been authorised as a broker for several years but had a turbulent and contentious history. Having done little to police the [...]
The AIM market is operated by the “London Stock Exchange“ for smaller growing companies. To join AIM, companies do not need a particular financial track record or trading history. The AIM rules have no minimum requirement in terms of size or number of shareholders. Further information can be had by clicking the link below: www.londonstockexchange.com/aim [...]
In terms of the “FSA Glossary of Definitions” the Official List is the main list of the “United Kingdom Listing Authority” and any corresponding list maintained by a competent authority in another “EEA” (European Economic Area) State. Also See: The UK Corporate Governance Code The Combined Code The UK Stewardship Code for [...]
