Monday, September 4, 2023

Terminonolgies in Finance

 It is important to keep up to date with financial Terminologies to avoid being caught off guard in any conversation. A few here and will be added

 

EBT - Earnings before Tax (same as PBT)

EBITDA - Earning before Interest, Tax, Depreciation and Amortization

BAAP - Relating to investment - Buy At Any Price

GARP - Relating to investment - Growth At Reasonable Price

PAT- Profit after Tax

COGS- Cost of Goods Sold

Operating Margin (as a %age) - (Revenue- COGS)/Revenue

EPS - Earnings per Share

P/E Ratio - Price to Earning ratio (Market Price per share/Earnings per share)

PEG Ratio- Price to Earning Growth Ratio - (P/E)/Growth in EPS. Thus if P/E is 15 and Growth in EPS is expected to be 10% then PEG Ratio is 15/10 =1.5

FCF- Free Cash Flow

 NOPAT- Net Operating Profit After Tax- Same as Profit after Tax, excluding other incomes and expenses not relating to operations.

PPE- Property Plant and Equipment

Other financial terms:

ROU- Rental payments converted to assets and liabilities

Lease liabilities- Part of above

XBRL-eXtensible Business Reporting Language. global, machine readable, std reporting. Mostly for listed companies reporting

IFRS- International Financial Reporting System - way financials are audited and presented.

REIT- Real Estate investment Trust- pooling of assets and paying you dividends out of rental asset or gain on sale of RE.







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