TRADING GLOSSARY

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Sumit Jain

4760 Points Joined January 2009

Accounting earnings

Earnings of a firm as reported in its Profit & Loss account

Accounting insolvency

As per Books of Accounts, total liabilities exceed total assets. A firm with a negative net worth is insolvent according to the books. But in many cases, replacement value could be higher and in reality the firm may not be bankrupt. Such firms may revalue their assets to restore the net worth as per Books of Accounts.

Accounting Earning:

Earnings of a firm as reported in its Profit & Loss account.

Accounting Liquidating:

Assets of the company which can be quickly converted into cash

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Sumit Jain

4760 Points Joined January 2009

Account Payable

Money owed to suppliers/ other creditors

Account Receivable:

Money owed by clients to the company

Account Receivable Turnover:

The ratio derived by dividing net credit sales to average accounts receivable, an indication of how much time clients take to pay dues.

Accrual Bond:

Bond in which interest is accumulated and paid at the time of redeeming the bond along with the redeemable value.

Sumit Jain

4760 Points Joined January 2009

Acid Test Ratio:

The ratio of current assets minus liquid assets (like stock, pre-paid expenses etc) to current liabilities. The ratio is also known as quick ratio.

Acquiree:

The company that is to be acquired

Acquirer:

The company or person that is acquiring some asset

Acquisition:

When a company buys another company

Sumit Jain

4760 Points Joined January 2009

Acquisition of Assets:

An Acquirer buys out assets from Acquiree.

Acquisition of stock:

The merger in which Acquirer takes over the stock of Acquiree

Active:

The market where lots of trading takes place

Active Portfolio Strategy:

The portfolio in which stocks are frequently sold and bought using the available market information and forecasting techniques.

Additional Hedge:

A safety against borrowers defaults risk in the mortgage.

Adjusted Present Value:

Net present value calculation of an asset, if financed only by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows).