Josh L FF

Private equity refers to the ownership in a private corporation - a company which is not publicly traded. Learn more...

Preferred shares are a 'hybrid stock', a combination between a stock and a bond which are offered to shareholders. In the event of a company’s liquidation, they are considered senior to regular stocks as a claim to the company’s assets, but holders usually forfeit voting rights. Learn more...

Arbitrage is the practice of buying and selling an asset simultaneously in order to capitalise on price differences, either on different markets or in different forms of that asset. Profits are made in the price difference between those two markets, or in the increased value of an asset in one form over another. Learn More...

A balance sheet or statement of financial position is a summary of a company’s assets, liabilities and shareholder equity at a specific time and one of the three major financial statements. Learn more...

Forex, FX or simply Foreign Exchange is the name for the decentralised over-the-counter market in which currencies are traded. Learn more...

Inflation is the rate at which the price level for goods and services in an economy is rising (and therefore purchasing power is falling). It is an aggregated value occurring across the whole economy. Learn more...

Venture capital is the name given to the financial capital provided to young, startup businesses which investors, known as ‘venture capitalists’, predict to be highly profitable in the future. It is technically a subset of private equity, albeit with significant differences in approach, structure and risk. Learn more...

An initial public offering (IPO), also known as a flotation, is a company’s first release of buyable shares to the public stock market. Learn more...

LIBOR or ICE LIBOR (previously widely known as BBA LIBOR) stands for the London InterBank Offered Rate, set by the Intercontinental Exchange (hence the 'ICE' prefix). Essentially, LIBOR is the rate at which banks, which are the centre of the financial world, are able to borrow from each other in the London 'interbank' market. Learn more...

A leveraged buyout, or LBO for short, is the acquisition of a company or division of a company financed largely by borrowed funds (hence the term ‘leveraged’). Leveraged buyouts allow a private equity firm to finance a large acquisition without having to commit a lot of capital. Learn more...

A bull market is one in which prices are either rising or expected to rise very shortly. So, investors who are called ‘bullish’ are those eternal optimists of the stock market – people who expect the markets to rise. Learn more...

A bear market is one in which prices are either falling or expected to fall very shortly. So, investors who are called ‘bearish‘ are those eternal pessimists of the stock market; they expect markets to drop, and the economy to contract (become smaller). Learn more...

Liquidity is the term used to describe how easily a given asset may be converted into cash. As the most liquid asset, cash is the benchmark for measuring asset liquidity. Learn more...

Net Working Capital (NWC), or just 'working capital' as it is often referred to in practice, is a measure of an operation's liquidity. It can provide a rough indication of a company's ability to pay back its short-term creditors with funds which are immediately available (the working capital). Net Working Capital = Current Assets - Current Liabilities Learn more...

A commodity describes either a raw material or agricultural product which may be bought or sold on the commodity exchange, such as gold or cocoa. More recently, the definition has expanded to include financial products such as foreign currencies and indexes, which all now also belong to the commodity exchange, and, with the advent of technology, even mobile phone minutes and bandwidth! Learn more...

Return On Equity (ROE), also sometimes called return on net worth (RONW), is a measure of how much, as a percentage of the initial investment of a company’s shareholders, has been returned in profit. Learn more...

A profit and loss statement summarizes the revenues, costs and expenses a business incurs during a specific period of time, often the fiscal month, quarter, or year. It allows business leaders to make forecasts and devise future strategy. Learn more...

The 'Cost of Goods Sold' (COGS), or 'cost of sales', are those costs which are directly attributed to the manufacture of goods to be sold by a company. Obviously, this amount includes the cost of those products and raw materials used in creating the good. However, it also include more indirect expenses, like staff wages, factory overhead, and the costs involved in distribution. Learn more...

Payment protection insurance (PPI), also known as credit insurance, credit protection insurance, or loan repayment insurance, is a type of insurance which is sold alongside loans and credit cards. The purpose of PPI is to protect the buyer from the financial consequences of failing to make loan repayments, making the required payments when the borrower is unable to make them, for example due to sickness, unemployment, or other unforeseen circumstances.

Learn more...

A hedge fund is a portfolio of investments which pools the capital of a number of institutional/distinguished investors, which it can then use to buy securities and other instruments. They are unavailable to the general public. Read more

A pip, or, to give its full name, percentage in point, is the smallest change in price the exchange rate of a currency pairing can make in Forex. Read more