A financial statement that shows the profit or loss a company has made over a period of time....more on P & L
Par value
The nominal value of a share in terms of share capital as shown on the balance sheet....more on Par value
Parent company
A company that owns subsidiaries is the parent company of the latter....more on Parent company
Pareto optimal
A Pareto optimal, or Pareto efficient, outcome is one such that no-one could be made better off without making someone else worse off....more on Pareto optimal
Pari passau
Securities are rank pari passau if they have equal entitlements to a payment or other benefit....more on Pari passau
Passive investing
A strategy that avoids stock-picking. Usually synonymous with index tracking....more on passive investing
Patent Troll
A derogatory term for a patent holder who exploits the patent system is ways that are seen as unfair, inethical or harmful to society...more on Patent Troll
Payback period
The time taken to recover the initial investment. A seriously flawed method of evaluating investments....more on Payback period
Payout ratio
dividends ÷ post tax profits, or dividend per share ÷ EPS....more on Payout ratio
PE ratio divided percentage annual growth in earnings per share....more on PEG
Penny shares
A term often used by share tipping publications. Shares that have a low absolute price. Low prices are not unnecessarily an indication of good value....more on Penny shares
An exchange specialising in smaller companies; formerly known as Ofex....more on Plus market
Poison pill
An attempt to discourage an acquisition by making it more expensive or by reducing the value of the acquired business....more on Poison pill
Ponzi scheme
An investment scam that appears to be actually paying high returns by paying the supposed returns out of the investors' own capital....more on Ponzi scheme
Portfolio investment
Investment by investors who are not interested in taking an active part in the management of a company....more on Portfolio investment
The theory concerning the value and riskiness of portfolios as opposed to individual securities....more on Portfolio theory
Possible oil reserves
Oil reserves that have a significant probability of being commercially exploitable, but which can not be said to be probable....more on Possible oil reserves
Post balance sheet events
Events that occur after the balance the date to which accounts are prepared, but which have a material impact that must be disclosed in the accounts....more on Post balance sheet events
POTS
Plain Old Telecom Services; a synonym for old style switched telecoms....more on POTS
PPP (purchasing power parity)
An adjustment for the cost of goods and services, most often used when comparing GDP and similar countries across countries....more on PPP
Pre-emption rights
The rights of shareholders to be offered new issues of share before they are offered to non-shareholders....more on Pre-emption rights
Pre-exceptional
A description of a number given before exceptional items; adjusted by adding back exceptional costs and subtracting exceptional profits....more on Pre-exceptional
Preference shares
Shares that pay fixed dividends: payment of both dividends and capital takes priority over that of ordinary shares....more on Preference shares
Premium earned
The amount of premiums earned by the risk covered by an insurance company during a financial period....more on Premium earned
Premium income
The revenues an insurance company receives as premiums paid by customers....more on Premium income
Premium written
The amount of premiums customers are required to pay for insurance policies written during the year....more on Premium written
Prepayments
Any amounts that have been paid for goods and services not received by the end of an accounting period. Shown as a current asset in accounts....more on Prepayments
Prescription drug
A drug that may only be sold by a pharmacist when authorised by a written prescription from a medical practitioner....more on Prescription drug
Present value
The value of a stream of cashflows adjusted for risk and for the time value of money....more on Present value
1) The amount of a loan (or bond) excluding interest, 2) An entity for whom an agent acts....more on Principal
Private client broking
Broking services offered to private individuals. These do to offer the access to research typically offered with the services offered to institutional clients....more on Private client broking
Private equity
Investment is unlisted companies, including the takeover and de-listing of listed companies....more on Private equity
Pro-forma
Accounts drawn up as though acquisitions and disposals that took place during a period, had taken place at the start of it....more on Pro-forma
Probable oil reserves
Unproven oil reserves which have a better than 50% chance of being technically and commercially producible...more on Probable oil reserves
A financial statement that shows the profit or loss a company has made over a period of time....more on Profit and loss account
Profit margin
Profit divided by sales. One of several measures that differ in the definition of profit used....more on Profit margin
Proportionate
Numbers that include each subsidiaries’ and associates’ numbers in proportion to the group shareholding in them. Often used by mobile telecoms companies....more on Proportionate
Proprietary trading
Trading in investments a bank does with its own money putting its own capital at risk....more on Proprietary trading
A document containing financial and other information prior to certain capital raising exercises such as IPOs....more on Prospectus
Proven oil reserves
Oil reserves are those that are known to exist and be exploitable to a high degree of certainty...more on Proven oil reserves
Provisions
A liability which may occur in the future. Shown in the profit and loss when created, thereafter in the balance sheet until reversed....more on Provisions
PSTN
Public Switched Telecom Network; old style switched voice telecoms...more on PSTN
Psychographics
Market segmentation by lifestyle; classifying people wants, aspirations and values....more on Psychographics
Purchase method
Requires that the buyer must be identified, and therefore goodwill created, in accounting for mergers and acquisitions....more on Purchase method
Pure play
A share that gives investors exposure only to a particular industry or product market....more on Pure play
Put option
An option that gives its holder the right to sell the underlying security at a pre-determined price....more on Put option
Put-call parity
A relationship between the price of European call and put options on the same underlying, the underlying security, and the risk free rate....more on put-call parity
PVNBP
value of single premiums + discounted value of regular premium streams...more on PVNBP
The theory that over or undervaluation can be measured by market value of assets ÷ replacement value....more on Q-theory
Qualified audit opinion
An auditors opinion stated on the accounts of a limitation in scope of the audit, or of disagreement with accounting treatment or disclosure....more on Qualified audit opinion
Quality of earnings
The extent to which earnings are stable, predictable, and reflect the company's underlying performance...more on earnings quality
Quantitative analyst
A specialist in the mathematical techniques of finance. Often called "quant" or "rocket scientists"....more on Quantitative analyst
Quick assets ratio
(current assets - stocks) ÷ current liabilities. A measure of a company's ability to pay short term debt....more on Quick assets ratio
Quote driven trading system
A trading system that operates by matching orders against market maker's quotes rather than against other orders....more on Quote driven trading system
Expenditure on researching and developing new products. Development costs are related to specific products and may be capitalised....more on R & D
RAJAR
An organisation that compiles audience share, market share and reach statistics for all British radio broadcasters....more on RAJAR
Random walk
Price changes in securities that are (a priori) purely random. Expected behaviour in efficient markets....more on Random walk
Rating
The price of a security compared to its recent fundamentals...more on Rating
Raw materials
Raw materials are the part of stocks that have been purchased for further processing but on which no work has yet been done....more on Raw materials
Razor-blade model
A razor-blade model is a business model based on selling a product at a loss in order to profit from the sale of consumables necessary for its use...more on razor-blade model
The opposite of de-equitisation, the subsitution of equity for debt...more on de-equitisation
Re-rating
A sharp change in a company’s valuation which reflects a significant change in the markets view of the company....more on Re-rating
Reach
The number of people who use a broadcast medium (such as a radio or TV station) over a given period of time....more on Reach
Real interest rates
Interest rates adjusted for inflation: (1+r)/(1 + i) - 1 where r is the nominal interest rates and i is inflation....more on Real interest rates
Real option
The option value created by the freedom to act in the future of a choice now....more on Real option
Real return
The return on an investment, less the reduction in its value as a result of inflation....more on Real return
Real terms
The change in a financial number after correcting for the effect of inflation...more on Real terms
Real time
System that respond, or data that is supplied, as events happen....more on Real time
Receivership
The running of a company, or management of particular assets, is handed over to a receiver appointed by creditors in order to recover debts....more on Receivership
Recession
A sustained but short term decline in the size of the economy....more on Recession
Record date
The date as at which a list of holders of a security is compiled in order to process a corporate action....more on Record date
Recovery
The amount of metal content extracted from ore, as a percentage of the actual metal content....more on Recovery
Red chip
Mainland Chinese companies listed and registered in Hong Kong....more on Red chip
Redemption yield
The IRR a buyer would receive by purchasing a bond at the current market price....more on Redemption yield
Redeemable
A security is redeemable is the issuer has a right to re-pay the liability it represents and cancel it....more on Redeemable
Expenditure on researching and developing new products. Development costs are related to specific products and may be capitalised....more on Research and development
A DCF valuation model: and dividend discount model adjusted for future capital raising....more on residual income model
Residual value
The value of the asset at the end of its useful life (for the purpose of depreciation), or at the end of a lease....more on residual value
Resource curse
The damaging effects of inflows money into a country as a result of exports of natural resources, and similar sources, also know as Dutch disease....more on Dutch disease
Retail format
The overall appearance and feel that a retailer presents to customers including its looks, layout, and the sort of range it stocks....more on Retail format
Large payments to shareholders that change the companies’ financial structure. They may be made in several different ways....more on Returns of capital
The profit an investment generates as a proportion of the value of the assets used to generate it. EBIT ÷value of assets....more on RoI
ROIC
Return on invested capital. Profit as a proportion of the total capital invested in a business rather than assets shown in the balance sheet....more on ROIC