Copy of `AngloAmerican - Shareholders glossary`

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AngloAmerican - Shareholders glossary Category: Economy and Finance > Shareholders Date & country: 21/09/2007, UK Words: 32

Backwardation
Is the condition in which the spot price of a commodity exceeds the price of a future.

Break-even analysis
Is the analysis of the level of sales at which a project would just break even. This may or may not include opportunity cost of capital.

Cash costs
Are all those costs, whether fixed or variable, that are actually incurred as cash, rather than as entries in a ledger (e.g. depreciation) when production is proceeding.

Convertible bond
Is a bond that may be converted into another security at the holder's option. Similarly convertible preferred stock.

Cum dividend
Means with dividend

Cum rights
Means with rights

Current asset
Is an asset that will normally be turned into cash within a year.

Current liability
Is the liability that will normally be repaid within a year.

Depreciation
Is the reduction in the book or market value of an asset; or the portion of an investment that can be deducted from taxable income.

Discount rate
Is the rate used to calculate the present value of future cash flows.

Discounted cash flow (DCF)
Is when future cash flows are multiplied by discount factors to obtain a present value.

Dividend
Is the payment by a company to its stockholders.

Dividend yield
Is the annual dividend divided by share price.

Double-tax agreement
Is the agreement between two countries that taxes paid abroad can be offset against domestic taxes levied on foreign dividends

EBITDA
Is earnings before interest, tax, depreciation and amortisation.

Enterprise value
Is the market capitalisation plus net debt (debt less cash and cash equivalents).

EPS
Is the earnings per share. This is calculated by dividing the profit by the number of shares.

Ex-dividend
Is the purchase of shares in which the buyer is not entitled to the forthcoming dividend.

Exceptional items
Are the in/out flow of cash on a one-off basis.

Forward cover
Is the purchase or sale of forward foreign currency in order to offset a known future cash flow.

Free cash flow
Is cash not required for operations or for reinvestment.

Hedging
Is buying one security and selling another in order to reduce risk. A perfect hedge produces a riskless portfolio.

Hurdle rate
Is the minimum acceptable rate of return on a project.

Interest cover
Is the times interest is earned.

LIBOR
Is the London interbank offered rate.

Market capitalisation
Is the number of shares multiplied by the share price.

Net present value (NPV)
A project's net contribution to wealth - present value minus initial investment.

Off-balance-sheet financing
Is financing that is not shown as a liability in a company`s balance sheet.

Production cost
Is the sum of net direct cash costs and depreciation, depletion and amortisation.

Retained earnings
Are earnings not paid out as dividends

WACC
Is the Weighted Average Cost of Capital.

Withholding tax
Is the tax levied on dividends paid abroad.