Learn

Reinvesting dividends or profits instead of taking them as cash.

A fund manager picks stocks trying to beat the market.

Returns above the market benchmark. Positive alpha means outperformance.

Spreading an intangible asset cost over time.

A company's yearly summary of performance and financial position.

An increase in the value of an asset over time.

Profiting from price differences between markets.

The lowest price a seller is willing to accept for a share.

How investments are divided among stocks, bonds, cash, etc.

Things a company owns that have value (cash, property, equipment).

A snapshot of what a company owns and owes at a specific point in time.

1/100th of a percent. 100 basis points = 1%.

A market falling 20% or more from recent highs.

A standard index used to measure fund performance.

Measures how much a stock moves compared to the market. Beta above 1 means bigger swings.

The highest price a buyer is willing to pay for a share.

Large, established, financially sound companies.

A loan to a company or government that pays interest.

Company assets minus liabilities. Often described as 'net asset value'.

A person or firm that executes buy and sell orders.

A market rising 20% or more from recent lows.

When a company repurchases its own shares from the market.

Money or assets used to generate income or invest.

Money spent to maintain or grow the business.

Profit from selling an asset for more than you paid.

Days to convert inventory and receivables into cash.

The movement of cash in and out of a business.

Compound Annual Growth Rate. Average yearly growth over a period.

Raw materials like oil, gold, or wheat traded on markets.

Earnings or returns growing on top of previous gains over time.

A market decline of 10-20% from recent highs.

How closely two investments move together.

The return required by investors for funding a company.

Current assets ÷ current liabilities. Measures short-term health.

Companies whose performance rises and falls with the economy.

Money a company has borrowed and must repay.

Total debt ÷ shareholders' equity. Measures leverage.

Failure to repay a loan or meet financial obligations.

Stocks less affected by economic cycles (utilities, healthcare).

Spreading the cost of physical assets over their useful life.

Reduction in ownership percentage when new shares are issued.

Interest rate used to calculate present value of future cash.

Spreading investments to reduce risk.

A cash payment made to shareholders, usually from profits.

Earnings ÷ dividends. Shows how safe the dividend is.

Percentage of earnings paid as dividends.

Annual dividend divided by share price. Shows income as a percentage.

Investing fixed amounts regularly regardless of price.

The peak-to-trough decline in portfolio value.

Bond price sensitivity to interest rate changes.

A company's profit after costs.

Net income ÷ shares outstanding.

Earnings before interest and tax.

Earnings before interest, tax, depreciation, and amortisation.

Market cap + debt - cash. Total company takeover price.

Ownership in a company. Shares represent equity.

Exchange-Traded Fund. A basket of securities traded like a stock.

The date after which new buyers don't receive the dividend.

Estimated true worth of an asset based on fundamentals.

Cash left after running the business and investing.

Shares available for public trading.

Evaluating stocks based on financial data and business quality.

Assumption that a company will continue operating.

Premium paid for an acquisition above asset value.

Revenue left after direct costs. Shows pricing power.

Revenue minus cost of goods sold.

Buying stocks expected to grow faster than average.

A company expected to grow faster than the wider market.

An investment that reduces risk in your portfolio.

Bonds with higher interest rates due to higher risk.

How long you own an investment.

A permanent reduction in the value of an asset.

Shows revenue, costs, and profit over a period of time.

A group of stocks used to track market performance (e.g. FTSE 100).

A fund that tracks a market index passively.

The rate at which prices rise, reducing purchasing power.

First sale of a company's shares to the public.

Trading on material non-public information (illegal).

Large organizations like pension funds and insurance companies.

Non-physical assets like patents, brands, and software.

EBIT ÷ interest expense. Ability to pay debt interest.

Cost of borrowing money, expressed as a percentage.

The true underlying value of an asset.

Goods a company has made or bought to sell.

The reason you believe an investment will succeed.

Individual Savings Account. Tax-free wrapper for UK investments.

High-yield bond rated below investment grade.

Metrics used to evaluate success.

Companies with market cap over £10 billion.

Use of debt to increase potential returns (and risk).

What a company owes to others.

An order to buy or sell at a specific price or better.

How easily an asset can be bought or sold without moving the price.

Owning a stock expecting it to rise.

Annual charge for managing a fund, as a percentage.

Borrowing money from a broker to buy investments.

The gap between a company's value and its share price.

Total value of all shares. Share price × shares outstanding.

A firm that provides liquidity by quoting buy and sell prices.

An order to buy or sell immediately at current price.

Trying to predict market moves to buy low and sell high.

When a bond's principal must be repaid.

Companies with market cap £2-10 billion.

A durable competitive advantage that protects profits.

Average price over a period, updating as time passes.

A pooled investment fund managed professionally.

Net Asset Value. Fund assets minus liabilities per share.

Revenue minus all expenses, taxes, and costs.

Net income as a percentage of revenue.

Return before adjusting for inflation.

Cash generated from core business operations.

Operating income as a percentage of revenue.

Contracts giving the right to buy or sell at a set price.

List of all buy and sell orders for a stock.

Total shares currently held by all shareholders.

When share price exceeds estimated fair value.

Face value of a bond or share.

Buying index funds without trying to beat the market.

Price ÷ book value. Compares price to net assets.

Price ÷ earnings per share. Shows how much investors pay for £1 of profit.

P/E ratio ÷ earnings growth rate.

Very low-priced shares, often speculative.

A collection of investments held by an investor.

Determining how much to invest in each holding.

Shares with fixed dividends, priority over common stock.

Analyst's estimate of a stock's future price.

Share price relative to revenue.

Profit as a percentage of revenue.

Legal document describing an investment offering.

(Current assets - inventory) ÷ current liabilities.

A sustained rise in stock prices.

Return after adjusting for inflation.

Adjusting portfolio back to target allocations.

Two consecutive quarters of negative GDP growth.

Profits kept in the business rather than paid as dividends.

Net income ÷ total assets.

How efficiently a company uses capital to generate profit.

Profit generated from shareholders' money.

Total income from sales before expenses.

The chance of losing money or not meeting expectations.

Returns considering the level of risk taken.

A category of stocks in similar industries.

Analyst at a brokerage providing research to clients.

The process of transferring shares and cash after a trade.

When new shares are issued, reducing existing ownership.

An owner of shares in a company.

Risk-adjusted return measure. Higher is better.

Borrowing and selling shares betting the price will fall.

Rapid price rise forcing short sellers to buy back.

Companies with market cap under £2 billion.

A company separating a division into a new public company.

The difference between the bid and ask price.

UK tax of 0.5% on share purchases.

Dividing existing shares into more shares at lower price.

Order to sell if price falls to a set level.

Price level where buying tends to emerge.

Using price charts and patterns to predict moves.

Estimated value of a company beyond the forecast period.

Share price change plus dividends.

Number of shares traded in a period.

Shares bought back and held by the company.

When share price is below estimated fair value.

Buying stocks priced below their intrinsic value.

A stock trading at a low price relative to fundamentals.

Assessing what a company is worth based on its fundamentals.

How much the share price moves. Higher volatility means bigger swings.

Blended cost of debt and equity financing.

Current assets minus current liabilities.

Removing a worthless asset from the books.

Income from an investment as a percentage.

Graph showing interest rates across bond maturities.