Vocabulary Flashcards
What does IPO stand for?
Initial Public Offering
What does SPAC stand for and what is it?
Special Purpose Acquisition Company
A Special Purpose Acquisition Company (SPAC) is a company created solely to merge or acquire another business and take it public — a cheaper, faster alternative to an initial public offering (IPO).
What does EBIT stand for?
Earnings Before Interest and Taxes
What does PEG stand for and what is it?
The ‘PEG ratio’ (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company’s expected growth.
In general, the P/E ratio is higher for a company with a higher growth rate.
What is a TFSA?
Tax-Free Savings Account
In the US the closest equivalent is a Roth IRA account.
What does EPS stand for?
Earnings Per Share
What does EBITDA stand for?
Earnings Before Interest, Taxes, Depreciation, and Amortization
What does amortization mean?
Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time.
In relation to a loan, amortization focuses on spreading out loan payments over time.
When applied to an asset, amortization is similar to depreciation.
What does normalized earnings mean?
Normalized earnings are adjusted to remove the effects of seasonality, revenue, and expenses that are unusual or one-time influences.
What is equity?
Equity represents the value that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debts were paid off.
Equity = Total Assets - Total Liabilities
What are shares outstanding?
Shares outstanding refer to a company’s stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.”
What does CFPS stand for and what is it?
Cash flow per share functions as a measure of a firm’s financial strength and is calculated as the after-tax earnings of a company plus depreciation on a per-share basis.
Cash Flow Per Share = (Operating Cash Flow – Preferred Dividends) / Common Shares Outstanding
What is the market cap?
Market capitalization refers to the total dollar market value of a company’s outstanding shares of stock.
Market cap = share price x # shares outstanding
What is capital stock?
Shares outstanding
What does YTD stand for?
Year-to-date
What does REIT stand for?
Real estate investment trust
What does ROC stand for and what is it?
Return of capital occurs when an investor receives a portion of their original investment that is not considered income or capital gains from the investment.
ROC = Net income/ debt + equity
What is book value?
The book value of a company is the net difference between that company’s total assets and total liabilities, where book value reflects the total value of a company’s assets that shareholders of that company would receive if the company were to be liquidated.
What does BVPS stand for?
Book value per share
What does MTM stand for and what is it?
Mark to market (MTM) is a method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution’s or company’s current financial situation based on current market conditions.
What is P/B ratio?
Price-to-book ratio
The P/B ratio measures the market’s valuation of a company relative to its book value.
P/B ratios under 1 are typically considered solid investments.
What is ROE?
Return on equity
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets.
ROE = Net income/ average shareholder equity Shareholder equity (net assets) = assets - debt
What is beta?
Beta is a measure of a stock’s volatility in relation to the overall market. Individual stocks are ranked according to how much they deviate from the market.
What does SIR stand for and what is it?
Short interest ratio
SIR is a comparison of short interest to average daily trading volume. It represents the theoretical number of days, given average trading volume, short-sellers would need to exit their positions.
