Glossary

Assets

Assets are essential components held by businesses or individuals with the expectation that they will generate economic value over time.

Bull Market

A bull market is a period when financial market prices rise consistently over time, driven by strong investor confidence and positive economic conditions.

Capital Adequacy Ratio (CAR)

The Capital Adequacy Ratio (CAR) is a financial metric that measures a bank’s ability to absorb potential losses and maintain financial stability by ensuring it has sufficient capital to manage risks and meet regulatory requirements.

Capital Employed

Capital employed is the total amount of money invested in the business to make profits and run it. Capital employed shows how much money the company is using to generate returns.

Capital Expenditures (CapEx)

Capital Expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.

Cash Flow

Cash flow represents the net cash resulting from the adjustment of inflows and outflows in a business. Understanding cash flow periodically is crucial for businesses as it helps them manage operations effectively and sustain day-to-day activities.

Cash Flow Statement

The cash flow statement in an annual report offers a detailed overview of the cash entering and leaving a company over a specific period. Its primary purpose is to provide insights into the company’s liquidity, operational efficiency, and overall financial health.

Cash Ratio

Cash ratio provides a quick check of how strong a company’s cash position is in terms of clearing short-term debts using only cash and cash equivalents.

Cost of Capital

The cost of capital is the minimum rate of return a company must earn on its investments to satisfy its investors and lenders.

Credit-Deposit Ratio

The credit deposit ratio is a financial ratio of the total loans lent by a bank to the total deposits received in the same period. The credit deposit ratio is an indicator of the bank's ability to cover loan losses and withdrawals by its customers.

Debt-to-Equity (D/E) Ratio

The Debt-to-Equity (D/E) Ratio is a financial ratio that compares a company’s total debt with its shareholders’ equity to measure how much the business relies on borrowed funds versus owner capital for financing its operations and growth.

Discounted Cash Flow (DCF)

Discounted Cash Flow (DCF) is a valuation method used to estimate the value of a business based on its expected future cash flows, which are adjusted (or "discounted") to their present value using a discount rate.

Dividend Yield

Dividend yield shows how much money is given to shareholders in dividends compared to the stock price. For investors seeking steady cash flow, like retirees, dividend yield is a key factor in choosing stocks.

EV/EBITDA Ratio

The EV/EBITDA ratio calculates the overall value of a company compared to its earnings before interest, taxes, depreciation, and amortisation. It is also known as the enterprise multiple.

Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA)

EBITDA stands for "Earnings Before Interest, Taxes, Depreciation, and Amortisation". It is a measure of a company's overall financial performance and is often used as an alternative to simple earnings or net income.

Earnings Call

An earnings call is a live, public conference call held by a publicly listed company to discuss its financial results for a specific period, which could be quarterly, semi-annually, or annually.

Enterprise Value

Enterprise value measures the total value of the company. It gives a comprehensive idea of the company by taking into account all factors like market capitalisation, short-term and long-term debt, and any cash or cash equivalents on the company’s balance sheet.

Equity Dividend Rate

The Equity Dividend Rate shows how much of a company’s profit is paid to shareholders as dividends. It tells you what percentage of your share’s value you’re getting back as income.

Financial Leverage

Financial leverage refers to the strategic use of borrowed capital (debt) to finance investments or business operations with the goal of increasing the potential return on equity.

Gross Non-Performing Assets (NPA)

Gross NPA (Non-Performing Assets) represents the total value of loans for which borrowers have failed to make timely payments. It reflects the bank's overall credit risk and indicates the quality of its loan portfolio.