Stock market terms for beginner and intermediate young investors

If you have been following this newsletter you may have read me use words like revenue, earnings, profit, share price, but I have not given a detailed indexing of those words used, so I want to dedicate this article to that only:

1.   Earnings: After-tax net income, a company’s bottom line or profits after it has reduced all expenses including tax.

2. Earnings per share (EPS): A company’s profitability that indicates how much profit each outstanding common shares have earned or when earnings of a company are divided among shareholders based on the company’s share price over a period of time.

3. Revenue: The total money a business receives, it is not taxed yet.

4. Net income: what a business receives after taxes, deductions and other expenses.

5. Gross profit: selling price of your product minus the selling price

6. Gross profit margin: A metric used to assess a firm’s financial health and is equal to revenue less cost of goods as a percent of total revenue

7. Annual report: A report prepared by a company to impress shareholders, contains the company’s cash flows, and management strategy.

8. Arbitrage: Buying and selling securities or stocks on different markets and at different selling points.

9. Bull market: Upward trend of a market, the stock gains momentum going up.

10. Bear market: Downward trend of a market, the stock plummets going down.

11. Broker: Someone who buys and sells stocks for you in exchange for a fee (commission)

12. Dividend: A portion of a company’s earnings that is paid to shareholders on a quarterly or annual basis.

13. Leverage: Borrowing shares in a stock from your brokers with the goal of making a profit.

14. Margin: An account that lets you borrow money from a broker to purchase an investment.

15. Debt: Borrowed money used by an individual or business for leverage.

16. Company fiscal report: A period of one year that companies use for financial account, budgeting and measuring financial performance.

17. Moving Average: A stock’s average price-per-share during a specific period of time

18. Initial Public Offering (IPO)- The first sale of a stock by a company to the public

19. Yield: The measure of the return on an investment that is received from the payment of a dividend

20. Volatility-The price movements of a stock or the stock market as a whole, high volatility means a stock has more ups and down movements daily, it can be rewarding or very risky.

21. Volume- Number of stocks traded during a particular time period, measured in average daily trading volume.

22. Short term assets: Assets that can be easily converted to cash by next year e.g cash, securities, accounts receivable and rent.

23. Long term assets: Assets a company uses for its production process and can last more than a year without converting to cash e.g property, plant, equipments, long term investments, patents, copyrights, franchises, goodwill, trademarks.

REFERENCES

1. Investopedia.com

2. Understanding the stock market: Making money through the stock market, how to invest in the stock market; kago Keotshwaetse