EXPLANATION OF FINANCIAL TERMS
|
|
Balance Sheet
The statement featured in the Annual Accounts that indicates the value of the
company’s assets and liabilities as at the end of its financial period (the
Balance Sheet date) and the ways that these have been financed through external
debt, internal profit generation and funds raised from the issuing of share capital.
Bear
An investor who believes prices
will fall. A bear market is a persistent falling market.
Bed and Breakfast
The practice of selling a share
or unit trust and buying it back the next day to establish a disposal for capital
gains tax calculations.
Best execution
The best available price for
a stockbroker's customer.
Bid/offer spread
The difference between the
price at which investors can buy units (the offer price) and the price at which
they can cash them in (the bid price). Typically, the margin between the prices
is between 5 and 6 per cent but it can be as low as zero or as high as 8 per cent.
Big bang
A reference to 27 October 1986
when the Stock Exchange switched to new rules and automated dealing.
Blue chip
A solid, large, well managed
and hopefully safe company. The term comes from an American poker expression for
the highest value of chip.
Bonus issue
Also known as a capitalisation
or scrip issue of free shares to an investor. Watch for the complication of the
consequent adjustment to the company's share price.
Bull
An investor who believes share
prices will rise. A bull market is a continually rising market.
|
