52 week high:The highest price a security has traded at over the past 52 weeks. 52 week low:The lowest price a security has traded at over the past 52 weeks. Advance-Decline Line:One of the most widely used indicators to measure the breadth of a stock market advance or decline. Each day or week the number of advancing issues is compared to the number of declining issues. If advances outnumber declines the net total is added to the Annuity:Series of equal cash flows at regular intervals. Average daily volume:The total trading volume of a stock over a certain period divided by the number of trading days in that period. Average payable period :Payables / ((Cost of goods sold + selling & administrative expenses – depreciation)/365) Badla:A stock market based financing mechanism used for financing the weekly trading positions of equity buyers. These transactions involve the investment of funds through an equity purchase transaction and a matching sale transaction one week later. Also known Beta coefficient:Measure of the sensitivity of an asset to market conditions; it is the relevant risk measure for calculating an asset's required rate of return. Bid:The highest price that any one is willing to pay for a share at that time. Bid Vol:The volume of a stock for which current bid is placed. Bollinger bands: This technical indicator plots trading bands two standard deviations above and below a 20 period moving average. Bonus issue: Shares of stock given as a bonus to present stockholders usually free of cost. Also known as stock dividend. Book value per share (BVPS):Book value of common equity / Common shares outstanding at balance sheet date. Break-even analysis: Procedure used to tell the manager how profits will vary when production costs sales volume and selling price vary. It essentially is an indicator of the point where a firm's costs equal its expenses. Capital asset pricing model (CAPM):Model of the relationship between systematic risk and expected return. It is a widely used basis for valuing financial assets. Capital expenditure(capex):Cash outflows associated with a long term investment or capital budgeting projects. Cash flow:Total dollar amount of funds available for the firm to put to productive uses. Cash flow per share (CFPS): Cash flow from operations after taxes / Common shares outstanding Change:The difference between the last trade price and the previous close price of a stock. Charts:Technical analysis uses four types of charts: 1) Line chart: only the closing price is plotted for each successive day. 2) Bar chart: the days range is represented by a vertical bar showing the open high low and closing prices. Confirmation:Having as many market factors as possible agreeing with one another. For example if prices and volume are rising together volume is confirming the price action. Contribution margin:Used to denote the dollar amount that each unit sold will contribute in meeting fixed costs. Credit Ratios:Credit Ratios reflect the liquidity position of the company. Current Ratio :Current Assets / Current Liabilities Debt capital: Funds borrowed to finance the operations of a business. Debt to Assets :Debt / Total Assets Degree of financial leverage (DFL): Percentage change in net income for a given percentage change in net operating income. Degree of operating leverage (DOL):Percentage change in net operating income for a given percentage change in sales. Descending triangle: A sideways price pattern between two converging trendlines in which the upper line is declining while the lower line is flat. Discount rate: Rate used to convert future cash flows to present values. Discounted cash flow:The present value of future cash flow. Divergence: A situation where two indicators are not confirming each other. Dividend payout ratio: Ratio of dividends paid out to total earnings. Dividend per share (DPS):Total annual dividends paid to common shareholders / Common shares outstanding Dividend to Cash flow :Dividend paid on common shares / cash flow from operations after taxes Dividend yield :Dividend per share / price per share Dividends: Earnings and profits of a corporation appropriated for distribution among shareholders. Double top:Price pattern displaying two prominent peaks. Earnings per share (EPS):Earnings available for common shares / Common shares outstanding = Profit after tax / weighted average common shares outstanding Earnings yield :Earnings per share / price per share EBITDA margin :Earnings before interest tax depreciation and amortization / Sales Economic Value Added (EVA) :EVA represents the economic value of the firm and is computed by subtracting the firm's cost of capital (in monetary terms) from the firm's adjusted operating profit (NOPAT). Positive levels of EVA indicate that the management has been adding value through Economic Value Added Return on Capital :EVA / Capital Effective interest rate:Interest rate that recognizes the nominal or annual interest rate plus the extra interest gained because of compounding. Efficiency ratios:Efficiency ratios indicate the management's ability at making use of the assets of the business towards profitability. Enterprise Value:The cost of buying the right to the whole of the enterprise's core cash flows. This is the estimated value of the core operations of the enterprise as represented by the value of the various claims on cash flows and profit. = Market capitalization + ne Equity capital: Stockholders' or owners' investments made in an organization. Expected return: Average return from the investment calculated as the probability weighted sum of all potential returns. Financial assets: Resources such as cash or loans that are needed to acquire real assets. Financial leverage: Ratio of debt to equity or ratio of fixed financial charges to operating profit before fixed charges. Financial leverage is a financing technique that uses borrowed funds or preferred stock to improve the return on an equity investment. Flag:A continuation price pattern generally lasting less than three weeks which resembles a parallelogram that slopes against the prevailing trend. Free float: The percentage of stock that can be held by the public. Gross Profit Margin :Gross Profit / Sales Head and shoulders:The best known of the reversal patterns. At a market top three prominent peaks are formed with the middle peak slightly higher than the other two. When the trendline connecting the two intervening troughs is broken the pattern is complete. High:The highest traded price of a stock in a trading day at the time. After market close the highest price for the day. Initial Public Offering (IPO):A corporation's first offering of stock to the public. Interest coverage:Considers the extent to which all fixed financial charges are covered. = Earning before interest and tax / Financial charges Internal Rate of Return:This is the rate of return at which the present value of expected net cash flows from a project equal its initial cash outlays; a measure of the rate of profit per rupee investment. It is also defined as the discount rate that makes NPV equal to zero. Inventory days : Inventory / (Cost of goods sold / 365) Last trade volume:The volume of a last trade in a stock. Leverage ratios:Leverage ratios indicate the effectiveness of the business at using debt in order to generate an adequate rate of return. Line charts:Price charts that connect the closing prices of a given market over a span of time. The result is a curving line on a chart. Long-term debt to equity : Long-term debt / common equity Low:The lowest traded price of a stock in a trading day at the time. After market close the lowest price for the day. Market capitalization: The total value of all outstanding shares in the market; computed as number of shares times current market price. Momentum:A technique used to construct an overbought-oversold oscillator. Momentum measures price differences over a selected span of time. To construct a 10-day momentum line the closing price 10 days earlier is subtracted from the latest price. The resulting pos Moving Average: A trend following indicator that works best in a trading environment. Moving averages smooth out price action but operate with a time lag. A simple 10-day moving average of a stock for example adds up the last 10 days' closing prices and divides by 10. Net Present Value (NPV):Present value of cash inflows minus the present value of cash outflows. Represents the economic profit adjusted for risk and timing. Nominal Interest rate: Equals stated interest rate not taking into account compounding or inflation. Offer:The lowest price that anyone is willing to accept for a share at that time. Offer Vol:The volume of a stock for which current offer is placed. Open:The first price at which a stock trades in a trading day. Operating profit margin :Operating profit / Sales Opportunity Cost of Capital: Relevant discount rate to be used for financial decision making; it is the rate of return foregone from the next best alternative. Oscillators:Technical indicators that determine when a market is in an overbought or oversold condition. Overvalued:Description of a stock which seems to carry a higher price than fundamentals would suggest. Payout ratios:Payout ratios are indicators of the propensity of the company to reinvest or give out profits. = Dividend paid on common shares / Profit after tax available for common shareholdes PEG ratio:A stock's price/earnings ratio divided by its year-over-year earnings growth rate. Per share ratios:Per share ratios are indicators of the value of one unit of investment within a company. Perpetuity: Series of equal periodic cash flows that continues forever. Preferred Stock:Part of the capital stock of a corporation that has priority over the remaining stock or common stock in the distribution of dividends. Previous close:The last price at which a stock traded on the previous trading day. Price - earnings ratio (P/Ex):Price per share / Earnings per share Price / EBITDA:Price per share / Earnings before interest tax depreciation and amortization per share Price patterns:Patterns that appear on price charts and that have predictive value. Patterns are divided into reversal and continuation patterns. Price ratios:Price ratios indicate the value of the share in terms of company valuations and market valuations. Price to book value (P/BVPS) :Price per share / Book value per share Price/CFPS:Price per share / Cash flow per share Profitability ratios:Profitability ratios indicate the management's ability to use capital and to put it to its optimum use. Quick ratio :Current assets - inventories / Current liabilities Rate of change:A technical analysis technique used to construct an overbought-oversold oscillator. Relative P/Ex :P/Ex of a stock / P/Ex of the market Relative Performance: Movement of a stock price over a period compared to a market index (like the KSE 100). A performance below market means the stock shows relative weakness in price movement (underperformed the market) and a performance above market means the stock shows r Relative Strength Index (RSI):An indicator that gives warnings about possible trend reversals. RSI is plotted on a vertical scale from 0 to 100. Values above 70 are considered to be overbought and values below 30 oversold. Required rate of return:Minimum rate of return that the project must yield to justify its acceptance. Resistance: A price or price zone above the current market line where selling power is enough to halt a further price increase. Retained earnings:Net profits kept to accumulate in a business after dividends are paid. Retention Ratio:Ratio of retained earnings to total earnings for the period. Return on Capital Employed :Earnings before interest depreciation and amortization / Net assets Return on Equity (ROE):(Profit after tax) / (average common equity) Return on Total Assets :Earnings before interest and tax / Total Assets Reversal patterns:Price patterns on a price chart that usually indicate that a trend reversal is taking place. Rights Issue:The offer to present stockholders to purchase additional stock at a discount from present market prices. Sales per share: Sales / Common shares outstanding Shares outstanding:The total numbers of shares of common stock issued and subscribed by investors. Support:A price or price zone beneath the current market line where buying power is sufficient to halt a price decline. Systematic risk:The relevant risk for pricing an asset: depends on the extent to which an asset's returns are affected by general economic conditions. Tax shields:Amount of depreciation and/or interest charged against income thus protecting that amount from tax. Technical analysis:The study of market action usually with price charts which includes volume and open interest patterns. Total debt service coverage :Cash flow from operations after taxes + rentals + adjusted interest / interest + rent +current maturities + sinking fund payments Total risk:Systematic risk plus unsystematic risk. Traded Vol:The volume of trade in a stock. Trend:Refers to the direction of prices. Rising peaks and troughs constitute an uptrend; falling peaks and troughs constitute a downtrend. Trendlines:Straight lines drawn on a chart below reaction lows in an uptrend or above rally peaks in a downtrend that determine the steepness of the current trend. Triangles:Sideways price patterns in which prices fluctuate within converging trendlines. The three types of triangles are the symmetrical the ascending and the descending. Undervalued:Security selling below its liquidation value or the market value that analysts believe it deserves. Underwriter:To assume risk of buying a new issue of securities from the issuing corporation or government entity and reselling it to the public. Unsystematic risk:Risk that is company specific and can be eliminated through diversification (thus also known as diversifiable risk). Valuation:Process of analyzing a company's financial statements and its internal and external environment in order to eventually reach a fair price for its stock. Volume: The total volume traded in a stock. Weighted moving average (WMA): A moving average that uses a selected time span but gives greater weight to more recent price data. Weighted-average cost of capital (WACC):The cost of each component of capital used by the firm multiplied by the proportion of that component in the firm's capital structure.
