Mortgage brokers, insurance brokers, Forex brokers and stock brokers are all covered by the term. The most common carry trade of recent years has been in Yen. ( EBIT) Earnings Before Interest Taxes Depreciation and Amortization. In general, you do not have to pay capital gains tax on your car, your main home, ISAs or personal belongings worth £6,000 or less. See also technical constraint. If a bureau de change buys and sells all day long (and the exchange rates do not change) they will make money on the spread. Leaving the parent … "A glossary of business terms", Business English, 2004, ISBN 9780764124440 This page was last edited on 28 October 2020, at 05:54 (UTC). When a company gets into financial trouble and is unable to pay its debts, an administrator or administrative receiver may be appointed. A lower allocation rate means less value for money. This Business terms page will help you manage and understand common business vocabulary across the business domain, providing an authoritative source for all business operations, including its Database Systems. This is London’s financial district. This represents your small business’s obligations to pay debts owed to lenders, suppliers, and creditors. By using the Data Catalog business glossary, an organization can describe its business vocabulary as a hierarchy of terms, and it can create a classification of terms that better represents its business taxonomy. Creditors must vote to approve the reorganization plan. Collateralized Debt Obligations – toxic financial instruments at the heart of the credit crunch. This is the tendency of economies to move through periods of boom and bust, with fluctuations in economic growth occurring every five years or so. The term comes from poker, where blue chips are traditionally the highest-valued chips in the game. In theory, equity analysts are supposed to provide impartial information on the companies they analyze. Our Glossary of Business Banking Terms aims to de-mystify the most common banking terms by explaining in plain English what they mean. The structure begins with a broad term and more refined terms are added as sub-terms. Bankers’ drafts are considered a safe way of obtaining money from someone you don’t know. Markets tend to work on the basis that black swans either don’t exist or appear with such irregularity that they are not worth worrying about. Most banks have been unable, as well as unwilling, to state how much the write-down of those asset values will cost them, and how much of a black hole is in their balance sheet. The Treasury now sets the inflation targets and the Bank’s monetary policy committee sets interest rates to try to meet them. Chief operating officer: A chief operating officer or c… The bear markets of 1987 and 1998 fit into this category. The smaller the spread, the better the deal is likely to be for the buyer. That is, it’s calculated under the assumption that any interest paid is included in the principal payments balance and the next interest payment will be based on the slightly higher account balance. Cost-push inflation occurs when production input costs – wages, raw materials – rise. By purchasing a bond you are lending money to the institution issuing the bond. Black swan events are typically random and unexpected, and some think the current financial crisis is a black swan. Investment grade bonds are considered to be at the lower end of the risk-scale because large, famous companies with good finances and most governments are unlikely to go bankrupt and default on the IOU. National regulators now allow several other instruments other than common shares to count in tier one capital, which are commonly referred to as upper tier one capital. This glossary, with 269 terminologies and their meanings, is designed to serve the primary purpose of helping you in learning SEO. Economic expansions tend inexorably to create bubbles in share or house prices or both, which inevitably burst. The term typically refers to products such as coffee, cocoa and soya beans (soft commodities) or gold, aluminum and platinum (hard commodities). Council tax is set and collected by local government to help pay for local services like policing and refuse collection. They are obliged to tell you either way. The percentage of the money you pay into a pension scheme or life insurance policy that is actually invested. Few banks are willing to lend any more against these questionable assets and are reluctant to roll them over, preferring to have their cash back. An annuity is a financial product that pays out a fixed stream of payments to an individual. AIM allows these companies to raise capital by listing on a public exchange with much greater regulatory flexibility compared to the main market. This is the banker to the government and the other banks in a country. This starts with classifying terms into a hierarchical structure. Laura Lake is a former writer for The Balance Small Business. Also Read: Nigerian Stock Exchange – All you need to know. The leading dictionary of business, marketing & web design terms. As loans or credit agreements can vary in terms of interest-rate structure, transaction fees, late penalties and other factors, a standardized computation such as the APR provides borrowers with a bottom-line number they can easily compare to rates charged by other lenders. Put simply, if the original stockholders paid £100 to buy their stock and the bank has made £10 in profits each year since, paid out no dividends and made no losses, after 10 years the bank’s tier one capital would be £200. The most common form of business organization, and one, which is chartered by a state and given many legal rights as an entity separate from its owners. Asset stripping is the taking over a company with the aim of selling off its assets, such as property, to make a profit, rather than developing the business. Some acronyms have different meanings outside of the world of business. 2. Shareholders with voting rights vote on current issues, such as appointments to the company’s board of directors, executive compensation, dividend payments, and the selection of auditors. A high PMI indicates materials purchases are increasing and the outlook is positive. This is an analyst who forecast trends in stocks, indices and currencies by looking at patterns on charts of their historic performance. The overall account is then called the balance of payments – principally because the total of outflows must equal the total of inflows. Keep handy this glossary of marketing terms. Glossary of Int’l Business Terms Global connections anytime, anywhere Acceptance - This term has several related meanings: (1) A time draft (or bill of exchange) that the drawee has accepted and is unconditionally obligated to Those listed on the stock exchange must produce information on their profits six months into the financial year. A business glossary is a means of sharing internal vocabulary within an organization. Actuaries are employed by insurance companies and pensions providers to calculate factors such as life expectancy, accident rates and likely payouts by using complex mathematical formulas. It is the apex of all types of banks. The result of asset stripping is often a dividend payment for investors and either a less-viable company or bankruptcy. With the recent financial market turmoil, investors fled from risky investments and unwound many of their yen carry trades. Effective Demand. The most complete compilation of common business terms with a detailed explanation of their meaning. The City Corporation is Britain’s oldest local government; it has the status of a county, with powers that exceed those of London’s 32 other boroughs, notably control of its own police force. The balance of payments is influenced by many factors, including the financial and economic climate of other countries. Our Glossary of Business Terms helps you understand the words and phrases that you may encounter and use when you start, run and manage a business. This site uses Akismet to reduce spam. This is the appellation given to a company considered to be large, safe and prestigious. The CPI tracks changes in the prices of a basket of goods and services that a typical household might buy. The arithmetic mean, commonly called the average, is found by adding all the individual numbers concerned and dividing by how many numbers there were. Use the Wix Encyclopedia to easily search for the business terminology all professionals need to know. Auditors are accountants who must certify that the company accounts prepared and signed by the board of directors, and are a ‘true and fair view’ of the company’s financial position. A mortgage designed specifically for landlords looking to buy a property to let to tenants. Entrepreneur in Heat. For example, the average of N15, N25, N60 and N100 is N50 (N15+N25+N60+N100=N200; divided by 4 is N50). With interest rates in Japan at virtually zero, speculators have been borrowing there to invest in the UK or the US, where rates are more like 5%. This caused the yen to surge by over 10% in less than a fortnight. Oasdom Business Terms A to Z The Business glossary. Before digging deep into search engine optimization, you should be familiar with these terms and According to generally accepted accounting principles, the sum of the owner's (shareholders') equity and a business' liabilities equals the total assets a business has. Some bear markets are short – bad news creates a panic and stocks are sold off suddenly. If this isn’t possible, the administrator will try to get a better result for the creditors – by rescuing parts of the business – than would be possible if the company was wound up. Business Glossaries help define terminology across business units. Here’s How Video Marketing Can Become A Saviour For You. In the financial crisis that struck in August 2007, banks found it increasingly hard to raise funding in the wholesale money markets. Please note that because there are so many different descriptions applied to fees, we have grouped all the different … The prolonged bear market of 2000-2002, following the bursting of the hi-tech bubble, was the worst since the 1929-1932 crash when overvalued stocks, economic crises in Europe, banking crises in the US, reductions in international trade and a lack of confidence led to three years of massive declines. This is a monthly CBI survey on conditions in the industrial sector. Earnings. The current concern focuses on naked CDSs on sovereign debt. Characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The CIPS with RBS produces monthly Purchasing Managers’ Index (PMI) reports, which cover manufacturing, construction and the service sector. This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields. These are our own definitions and meanings used to clarify these terms. A business arrangement in which the day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment. If a plan cannot be agreed, the court can either convert the case to liquidation under Chapter 7 or, if this is in the interest of creditors, return the business to the status quo before bankruptcy. France’s equivalent to the FTSE 100 but with only 40 companies. This is the tax paid to the Inland Revenue when you make a capital gain, that is, a profit from selling an asset, which could be anything from shares to a painting or a holiday home. She's a Business Glossary of business terms - A to Z Handy definitions of financial and economic jargon - from libor and quantitave easing to black swans and dead cat bounces Banks embraced them as a way of shifting debt off their balance sheets, enabling them to lend more. This gives detailed economic analysis and inflation projections on which the Bank of England’s monetary policy committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the next two years. Some analysts privately rubbished the internet stocks they covered, but said the opposite in reports for public consumption. Shares increased in value over 14-fold – prompting former Fed chairman Alan Greenspan to utter his famous warning of “irrational exuberance” among investors – before they declined by almost 50% between 2000 and 2002. Asset-backed commercial paper is a form of IOU that banks use in money markets to lend and borrow from each other. Annual Bonus means any compensation, in addition to Base Annual Salary relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form. Arbitrage is basically buying a security in one market and simultaneously selling it in another market at a higher price, profiting from the temporary difference in prices. The part of the balance of payments that records a nation’s incoming and outgoing investment flows, such as payments for parts of or entire companies (direct or portfolio investment), stocks, bonds, bank accounts, real estate and factories. For example, an ‘agreement’ is a general term that can be used to classify other, more specific terms like ‘contract’ and ‘purchase order’. … Business Constraint (s) Business constraints are limitations placed on the solution design by the organization that needs the solution. This could be any major asset, but typically a house may be used as collateral. An asset is anything a business owns. Governments are in a constant battle to even out the peaks and troughs – Gordon Brown prides himself on ending boom and bust – but none has ever completely solved the problem. A market when prices roar ahead. The individual assets of the company, such as its equipment, real estate, brands or intellectual property, may be more valuable than the company as a whole due to such factors as poor management or poor economic conditions. In 1997, the chancellor, Gordon Brown, relinquished the power to set interest rates, transferring it to the Bank. Tier two capital is also known as supplementary capital. The period of time when an annuity is being funded and before payouts begin is referred to as the accumulation phase. A knowledge-driven hub dedicated to promoting self reliance & entrepreneurship. They offer clear definitions across the entire enterprise with the goal of keeping terms consistent and helping everyone stay on the same page. In the past couple of days, though, the yen has fallen back again, possibly as calmer markets have encouraged a renewed bout of carry trading. Bonds are generally issued by either the government (gilt-edged bonds), or a public company (corporate bonds). There is a big risk, though, that the exchange rate moves against you. But when investors realize that the world is not coming to an end, markets bounce back. Such loans normally repay a fixed rate of interest (unlike equities) over a specified time and then repay the original sum in full after a fixed period when the bond matures. In the US, the Federal Reserve. This commercial paper is usually not held on banks’ balance sheets, but if they can’t roll it over for cash from another bank they have to bring it onto the balance sheet and eventually count up the value of the dodgy assets behind them. We have gathered together important terms in entrepreneurship, finance, banking, accounting, ecommerce, online business, internet marketing and … Learn how your comment data is processed. Corporation tax is paid by companies on their profits. If it looks like an issuer might have trouble paying, its CDS price rises because the bond is more risky and it will cost more to insure. Yes, there are more business terms to be added to this list soon. Producers pass the cost on to consumers through price rises. It is a statement of account that presents summary of assets and liabilities of a business in a well arranged form, so that the financial position of the business is clearly ascertained. The notion of impartial advice to investors took a huge knock in the Wall Street scandals of recent years. Capital ratios are a measure of a bank’s capital strength used by regulatory agencies. Glossary of business related terms June 28, 2014 — 6.01am Save Log in, register or subscribe to save articles for later. This includes any fees or additional costs associated with the transaction but does not take compounding into account. These financial products are primarily used as an income stream for retirees. Corporate raiders specialize in launching hostile takeovers of companies with undervalued assets. The difference between the two prices is the spread. Run by unit trusts, open-ended investment companies or investment trusts, these are portfolios of shares or bonds run by fund managers, who are (hopefully) expert at buying and selling shares to maximize performance. Annuities are created and sold by financial institutions, which accept and invest funds from individuals. A commodity is any homogeneous item which may be freely bought and sold. There is no limit to the number of levels in a hierarchy, but a hierarchy is often more easily understood when there are three levels or fewer. This is one of the various kinds of taxes in which everyone has an allowance before they become liable for capital gains tax and rates vary. But there is always subtle pressure on analysts to make favorable comments so firms do not take their mergers and acquisitions business to a rival investment bank. Central banks have pumped billions of dollars into the financial system in a bid to make it easier for banks to raise cash. This Business terms page will help you manage and understand common business vocabulary across the business domain, providing an authoritative source for all business operations, including its Database Systems. These flows might result from exports (an inflow or credit) or from imports (an outflow or debit). These transactions are treated as having been done at the start of the following business day. An annual general meeting (AGM) is a mandatory yearly gathering of a company’s interested shareholders. In the context of the stock market, traders often try to exploit arbitrage opportunities. They generally invest in a particular geographical area, have a defined strategy (eg income, growth or a mixture of both), or have a ‘theme’, for example, focusing on technology or smaller companies. Our glossary contains the most common phrases and jargon used together with the definition of what it actually means. It is a trusted reference business “dictionary” in an organization. An economic indicator of future inflation, because higher earnings cause price rises if they are not matched by increases in productivity. Channels of distribution: The channel used in the transfer of goods or merchandise from a manufacturer to the end user. Absence Culture : An absence culture is a business term for an organizational culture that is accepting of a certain amount of absenteeism (or irregular hours) amongst management personnel for vague or non-specific reasons. Tier one (core) capital, the more important of the two, consists largely of shareholders’ equity. Earnings Before Interest and Taxes. Below is a list of common small business lending terms (and their definitions) often seen and heard in the loan process, to help you better understanding the nuts and bolts of a loan, business financials, and other related This is considered a risk-free profit for the investor/trader. Their work contradicts random walk theory. The Nationwide produces a consumer confidence index at the start of every month in the run up to the Bank of England’s interest rate decision. The main goal of an administrator is to rescue the company as a going concern. You have entered an incorrect email address! They were invented in the late 1990s and are a form of insurance on bonds issued by companies or countries that investors buy and sell. Accounts payable is a business finance 101 term. This is a metaphor for the protocol that exists in financial institutions to insulate analysts from pressures from the deal-makers. A term often heard is “management buy-out” which means the management buys company shares to become the owner of that company. ( EBITDA) Economies of Scale. A low PMI indicates orders for materials are down and the economic outlook is less favorable. There are risks involved. This is an event that is extremely hard to predict. It produces a monthly indicator of price changes in retail outlets, called the Shop Price Index. The rest goes to the provider to cover charges. Small Business Development Center (SBDC) - An U.S. organization set up to assist small business owners by providing management and technical resources to help start and run their businesses. The field of marketing is very diverse and ranges from word-of mouth-advertising to corporate brochures. Small business owners can sometimes struggle to understand the different terms used by banks. But reliefs and exemptions are available – so those who could be liable are best seeking expert advice. The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange (LSE) that is designed to help smaller companies access capital from the public market. Chapter 11 bankruptcy is a form of corporate financial reorganization in which a company’s assets gets sold off to pay creditors. Effective Tax Rate. Budget is simply a formal statement of estimated income and expenses based on future plans and objectives. Sometimes referred to as A/P or AP for short, accounts payable can be short or long term depending upon the type of credit provided to the business by the lender. If this fails, the administrator will sell the company’s assets to make at least a partial payment to creditors. Many shares and bonds are now quoted on more than one stock market and after-hours dealing allows dealers to buy and sell outside the official hours of the market. The business designer can help an organization to build a viable business model by readily testing its riskiest assumptions against the marketplace. Contact us: [email protected]. Automaticity:In disputes, the “automatic” chronological progression for settling trade disputes in regard to panel establishment, terms of reference, composition and adoption procedures. The balance of payments accounts record all flows of money in and out of a country. 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