E56 20 New Words

E56 20 New Words by LB

Revenue

the total amount of money a company receives from its business activities, primarily from the sale of goods or services, before any expenses are deducted. It represents the top line of a company's income statement and indicates the scale of its sales generation. 💰📈📊 | sales, turnover, gross income

Profit (Net Income)

the actual earnings of a company after all expenses, including the cost of goods sold, operating expenses, interest, taxes, and depreciation, have been subtracted from the total revenue. Often referred to as the "bottom line," it represents the money left over for shareholders and indicates the company's true profitability. 💵✅ 💯| net earnings, net profit, bottom line

Market Maker

a firm or individual that quotes both buy and sell prices in a financial instrument or commodity, holding an inventory of securities to facilitate trading and profit from the bid

Underwriter

an investment bank or financial institution that guarantees payment in case of damage or financial loss and accepts the financial risk for a fee. In the context of IPOs or bond issuances, they assess risk and help companies raise capital by purchasing securities from the issuer and reselling them to the public. ✍️🛡️💸 | guarantor, risk assessor, issuer intermediary

Technical Analysis

a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts use charts and patterns to identify trends and predict future price movements, focusing on market psychology and historical trading data rather than the intrinsic value of the company. 📉📈📊 | chart analysis, market pattern analysis, price action analysis

Fundamental Analysis

a method of evaluating securities by attempting to measure their intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts study a company's financial statements, management, industry, and overall economy to determine if a security is undervalued or overvalued. 🔎🏢💰 | value investing, financial statement analysis, intrinsic value assessment

Yield

the return on an investment, usually expressed as an annual percentage rate based on the investment's market price or cost. For stocks, it's often the dividend yield (annual dividend divided by stock price), while for bonds, it can refer to current yield or yield to maturity, reflecting the income generated relative to the investment amount. 🌱💰 📈 | return, rate of return, income yield

Stop Loss Order

an order placed with a broker to buy or sell a security when it reaches a certain price. It's designed to limit an investor's loss on a position. Once the stop price is triggered, the order becomes a market order to buy or sell at the best available price. 🛑📉🛡️ | loss

Limit Order

an order to buy or sell a security at a specific price or better. A buy limit order will only be executed at the limit price or lower, and a sell limit order will only be executed at the limit price or higher. Limit orders provide price control but don't guarantee execution. 🎯 🏷️ ✅ | price

Margin Call

a broker's demand that an investor deposit additional money or securities into their margin account to bring it back to the minimum maintenance margin. This occurs when the value of securities purchased with borrowed funds (margin) declines, reducing the equity in the account and posing a risk to the broker. 🚨⚠️💸 | collateral call, equity replenishment request, account deficit notice

Stock Split

a corporate action in which a company divides its existing shares into multiple shares to increase the number of shares outstanding without changing the total market capitalization. Splits reduce the stock price, making shares more affordable and potentially increasing trading liquidity. ✂️ ↔️ 📈 | share division, stock multiplication, increased share count

Merger

the combining of two or more companies, typically of roughly equal size, into a single new legal entity. Mergers are often done to achieve synergies, expand market share, or reduce costs, creating a larger and potentially more competitive company. 🤝 + 🤝 = 🏢 | unification, consolidation, amalgamation

Acquisition

the purchase of one company (the target) by another (the acquirer), where the acquirer takes control of the target company. Acquisitions can be friendly or hostile and are often aimed at growth, diversification, or gaining access to new markets or technologies. 🎯➡️🏢 | takeover, buyout, corporate purchase

Buyback (Share Repurchase)

a company's act of purchasing its own outstanding shares from the open market. Buybacks reduce the number of shares available, which can increase earnings per share and potentially boost the stock price, returning value to shareholders. ♻️ ⬆️ 💰 | share repurchase, stock buyback, equity reduction

Debt

money borrowed by one party from another, typically with the agreement to repay the principal amount plus interest over time. For companies, debt can be in the form of loans, bonds, or other forms of credit, used to finance operations or investments. 💸 ➖ ⏳ | borrowing, loan, credit

Liabilities

a company's financial obligations to others as a result of past transactions or events. Liabilities represent what a company owes to creditors, including loans, accounts payable, deferred revenue, and other debts. 🧾 📉 ⚠️ | obligations, debts, payables

Valuation

the process of determining the economic worth of an asset or company. Various methods are used, including discounted cash flow analysis, comparable company analysis, and precedent transactions, to estimate a fair price or value for investment decisions. ⚖️ 💰 🧐 | appraisal, worth assessment, financial estimation

Cash Flow

the net amount of cash and cash equivalents moving into and out of a company. It measures the actual cash a company generates and uses during a given period, crucial for assessing its liquidity, solvency, and ability to fund operations and investments. 💸 ➡️ ⬅️ 🔄 | cash movement, funds flow, liquidity stream

Balance Sheet

a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. It provides a snapshot of a company's financial position and follows the accounting equation: Assets = Liabilities + Equity. 📊 🏢 = | statement of financial position, snapshot of assets and liabilities, net worth statement

Income Statement (Profit and Loss Statement)

a financial statement that reports a company's financial performance over a period of time, summarizing revenues, costs, and expenses to arrive at net income (profit) or net loss. It shows how profitable a company has been during the reporting period. 📊 📈 📉 | profit and loss statement, statement of earnings, P&L