2017 -2018

Business Glossary

COMPAIGN BY :
• HARITAH Wijdane
• SEHLI Nazik
• MKNASSI Driss SUPERVISED BY :
• NAOUMIA Aymen
• Mr. HOUSSAINI
• IDRISSI Achraf
• BOUZID Mohamed
• HADDAD Zakaria
• BENJDIYA Ouissam

ECOLE NATIONALE SUPÉRIEURE D’ARTS ET METIERS

 What is a business glossary?
The practice of establishing a common vocabulary for an organization is widespread. A
common vocabulary improves communication and removes ambiguities within the
organization, leading to higher productivity and better utilization of resources. A business
glossary provides a framework where such a vocabulary can be created, nurtured, and
promoted for the benefit of the organization.
Common shared business vocabulary is in the heart of information governance, data quality,
and metadata management practices deployed by an organization. It is a vehicle of
communication where business and IT are on the same plane with no gaps in understanding.
Consider the following questions:
• What is the other party talking about?
• What do the terms in a requirements document mean?
• Do the specifications accurately reflect the requirements?
By having a common vocabulary in a business glossary, business and IT communities have
access to a comprehensive body of information. They also have knowledge about the data the
company generates, processes, stores, and uses to support its operations. Through a well-
designed hierarchy (taxonomy) and carefully selected and properly formatted business terms
(business vocabulary), users can navigate, browse, and search for information about business
terms, their meaning and usage, and the IT assets used to realize them. The ability to retrieve
information about data, its source, meaning, usage, and various aspects of processing it
promotes the understanding of and trust in the data. It also enhances the efficiency of the
processes concerning generation and use of the data.
In addition to providing an authoritative source for the terms and their meaning, the
combination of a business glossary in a catalog with other types of metadata provides access
to a rich store of knowledge and analytical capabilities. Business people have at their
fingertips answers to data questions such as the following examples:
• What information is out there?
• What does it mean?
• Where is it stored?
• How is it being processed and used?
• When was this information last refreshed?
• Who owns this information?
• Increase consistency and confidence in decision making.
• Decrease the risk of regulatory fines.
• Improve data security.
• Provide consistent information quality across the organization.
• Maximize the income generation potential of data.

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• Designate accountability for information quality.
A business glossary has many of the attributes that are required to support information
governance. In essence, all of these attributes depend on the ability to create, preserve, and
publish knowledge about information across the organization. This knowledge includes
awareness about what the information is, how it is used, and who uses it. It also includes
awareness about where the information is coming from, what happens to it along the way, and
where it ends up.
How can a business glossary help?

A business glossary goes beyond just a list of terms. Linking terms to IT assets establishes a
connection between business and IT and enhances collaboration between parties and users.
General business users have fast access to commonly used vocabulary terms and their
meaning often with additional information, such as any constraints and flags indicating
special treatment. A business analyst has a better understanding of the terms used in business
requirements, which translate to better and faster translation into technical requirements and
specifications. By viewing the IT assets assigned to a term, data analysts and developers can
be more precise in their job development or report design.
A business glossary provides an environment of sharing and collaboration so that you can
achieve information governance goals. A business glossary helps achieve these goals in the
following ways among others:
Enables data governance
• With a common language, supports compliance with regulations such as Basel II
• Represents and exposes business relationships and lineage
• Tracks a history of changes.
Accountability and responsibility
• Assigns stewards as a single point of contact
Improved productivity
• Allows administrators to tailor the tool to the needs of business users
• Provides access enterprise information when needed
• Enables the use and reuse of information assets based on a common semantic hub
Increased collaboration
• Captures and shares annotations between team members
• Offers a greater understanding of the context of information
• Provides more prevalent use and reuse of trusted information

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 A
Accounts: companies must produce an annual set of accounts.

Actively managed funds: run by unit trusts, open-ended investment companies or investme nt
trusts, these are portfolios of shares or bonds run by fund managers, who are (hopefully) expert
at buying and selling shares to maximise performance.

Actuary: actuaries are employed by insurance companies and pensions providers to calculate
factors such as life expectancy, accident rates and likely payouts by using complex
mathematical formulas.

Administration: when a company gets into financial trouble and is unable to pay its debts, an
administrator or administrative receiver may be appointed.

After-hours dealing: deals made between members after the official close of the market.

Allocation rate: the percentage of the money you pay into a pension scheme or life insurance
policy that is actually invested.

Alternative investment market: aim is the london stock exchange's global market for smaller,
growing companies.

Annuity: an annuity is a type of insurance policy that provides a regular income in exchange
for a lump sum paid into it on retirement.

Arbitrage: taking advantage of the difference in the price of a share or currency, usually in two
different markets.

Auditors: auditors are accountants who must certify that the company accounts prepared and
signed by the board of directors, are a 'true and fair view' of the company's financial position.

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 B
Balance sheet: a summary of the financial value of a company, usually published at the end of
its financial year.

Banker's draft : a cheque drawn from a bank or building society against real cash.

Black swan : an event that is extremely hard to predict. Generally associated with nassim
nicholas taleb's book, the black swan.

Blue chip : the name given to a company considered to be large, safe and prestigious.

Bonds : a bond is simply an iou. It is an agreement under which a sum is borrowed from an
investor at a stipulated rate of interest and repaid after an agreed period of time.

Broker : the generic term used to describe an intermediary between two parties, generally a
buyer and a seller.

Budget : the chancellor's annual announcement of the british government's fiscal policy
changes.

Bull market : a market when prices roar ahead.

Business cycle : the tendency of economies to move through periods of boom and bust, with
fluctuations in economic growth occurring every five years or so.

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 C
Capital account : the balance of payments is influenced by many factors, including the
financial and economic climate of other countries.

Capital gain : if you purchase 1,000 shares at £1 each and eventually sell them for £10 each,
you have made a capital gain of £9,000.

Central bank : the banker to the government and the other banks in a country.

Chinese walls : a metaphor for the protocol that exists in financial institutions to insulate
analysts from pressures from the deal-makers.

Collaterla : lenders will often ask for collateral or security against a loan.

Contents insurance : a typical policy will insure house contents against theft, and as well as
other eventualities such as flood, fire, lightning strike and subsidence.

Corporation tax : corporation tax is paid by uk companies on their profits.

Council tax : council tax is set and collected by local government to help pay for local services
like policing and refuse collection.

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 D
Day trading : day trading is the buying and selling of stocks during the trading day by punters
on their own account.

Deflation : a fall in the general level of prices - the opposite of inflation.

Depression : a depression is an economic downturn more severe and prolonged than a

recession.

Derivatives : usually referred to as complex financial instruments, derivatives derive their value
from something else - hence their name. The most common derivatives are futures and options
of bonds, equities and commodities.

Discount mortgage : with a discount mortgage you initially pay a rate of interest that is a set
amount below the lender's standard variable rate (svr), for a specified period of time, after which
you revert to the svr.

Dividend : when a firm makes profits, it may decide to reward its shareholders by paying them
a dividend on their investment.

Dividend yield: this is a percentage obtained by multiplying the net dividend per share by 100
and then dividing this figure by the current share price.

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 E
Ebit : a type of operating profit. Ebit stands for earnings before interest and tax.

Ebitda : a type of operating profit. Ebitda stands for earnings before interest, tax, depreciation
and amortisation.

Economic growth : economic growth usually refers to the growth in value of gdp (gross
domestic product).

Elasticity : usually used to explain consumer demand in response to changes in prices

Entreprise value : the enterprise value of a company is often used as an alternative to

straightforward market capitalisation - especially when talking about takeovers.

Equity : shares are bits of equity. When companies start up they need cash for an office and
employees.

Ethical investment : ethical investors avoid companies such as military equipment

manufacturers or firms that harm the environment.

Externalities : costs or benefits that affect society but are not included in the market price of a
good or service.

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 F
Fabrication : manufacturing process in which an item is made (fabricated) from raw or semi-
finished materials instead of being assembled from ready-made components or parts.

Facility management : operation, maintenance, and security of a facility, usually by an external

contractor.

Facility takeover : form of identity theft where an individual impersonates another and
completes a change of address in order to obtain that person's financial information and mail.

Factory cost : total cost of making a product at the production location, and comprising of raw
material, labor, and overhead costs.

Family business : company owned by one or more family members. In some cases, a family
business may be owned by more than one family.

Fast tracking : to do more things in the same time in order to finish a job earlier than normal
or planned. It is the process of reducing the number of sequential relationships and replacing
them with parallel relationships.

Fico score : the fico score is a credit score. These are used by mortgage lenders to predict the
borrower's ability and willingness to pay debts. Fico is an acronym for the fair isaac corporation,
which calculates the credit scores in the united states.

Finance company : financial organization that accepts deposits (and pays out interest on them)
and lends to consumers and/or businesses.

Financial company : a broad term used to describe many aspects of finance or the financ ia l
industry, such as financial instruments, financial services, financial institutions, financ ia l
advisors, or financial planning.

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Financial service authority : its responsibilities range from the sale of endowments and
insurance to controls on city dealers trading in derivatives.almost all kinds of financial services
firms must get permission from the fsa to do business in the uk.

Financial year : a firm's financial year can run over any 12-month period it chooses, although
the most common year-ends are march 31 and december 31.

Firm anomalies : strategy of trading based on belief that characteristics of a firm will result in
outperforming the market. Characteristics of a company which may be considered a firm
anomaly might be a strong management team.

Firmware : software or instruction set (such as the basic input output system or bios of a pc)
stored in the 'read-only' (non-volatile) part of a computer's silicon (solid state) memory because
it is rarely (if ever) changed, and does not vanish when the computer is switched off. See also
flash memory.

Fiscal : of or relating to public revenues (taxation), public spending, debt, and finance. In
comparison, the term 'monetary' relates to money and how it is supplied to, and circulates in,
an economy.

Fiscal agent : person or firm (such as a bank) who, as a fiduciary agent of a principal, services
debts, pays rents, distributes dividend payments, etc.

Fiscal capacity : an economic term related to the ability of groups and institutions to generate
revenue. When referring to the government, this depends upon many different factors, includ ing
personal incomes and industrial capacity. This is an important factor when governments are
developing their fiscal policy.

Fiscal policy : the use of government spending and taxation, as opposed to monetary policy, to
try to influence the level of economic activity.

Fiscal year : the uk fiscal year runs from april 6 to april 5. The us fiscal year runs from october
1 to september 30.

Five forces : external factors that affect the viability of an industry: (1) new competitors, (2)
existing competitors, (3) substitute products, (4) buyers, and (5) suppliers. Collective strength
of these forces determines the ultimate profit potential of an industry and of the firms in it.

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Fixed capital : that is employed in assets of durable nature for repeated use over a long period.
Also called fixed investment.

Fixed costs : costs that a company incurs in making goods regardless of how much it is
producing.

Fixed investiment : an investment in fixed assets, such as buildings or machinery.

Fixed rate mortgage : a mortgage where the interest you pay, and therefore your monthly
repayments, remains the same regardless of whether the bank of england base rate rises or falls.

Flag carrier : airline or ship-line registered under the laws of a country whose governme nt
gives it partial or total monopoly over international routes. In maritime law, all vessels (aircraft
or ships) are required to prominently display the national flag of the country of their registry.

Flexible factory : production facility organized to provide a full and varied range of operations
or services, across many product lines with very short changeover times. Most modern
automobile plants are designed as flexible factories. See also focused factory.

Flexible manufacturing : functions and processes for identifying and planning for demand,
materials, product production and release in which there is some flexibility in how the system
reacts to changes. Flexible manufacturing systems generally have two categories; machine
flexibility which is the ability to create different product types or change the order in how
processes are operated; and routing flexibility; which is the ability of more than one machine
to perform the same process or adjust for changes in capacity or volume.

Flexible mortgage : flexible mortgages come in many guises, but in most cases they allow you
to make extra lump sum or monthly payments, borrow back money, take payment holidays and
make underpayments.

Focused factory : production facility organized around a specific, narrowly- limited set of
resources, to provide a narrow range of operations or services in manufacture of a few products
at low-cost and high-throughput. Most mass production facilities are designed as focused
factories. See also flexible factory.

Foreigne exchange : foreign exchange, or forex, markets are where one currency is exchanged
for another

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 G
Gain : an increase in profit, price, or value

Gain on sale investments : the amount of profit recognized after a company elects to sell
investments. This is recorded as an increase on a balance sheet.

Gainful employment : employment situation where the employee receives consistent work and
payment from the employer. Gainful employment is most often associated with college
graduates who become employed after they graduate as a way to measure or rank the college
or university where they received their education and training.

Gap in the market : an unmet consumer need or a group of potential customers who are not
yet purchasing a good or service. Gaps in the market represent opportunities for companies to
expand their customer base by increasing awareness and creating targeted offers or advertising
campaigns to reach the untapped market. Identification of gaps in the market is an important
step in increasing market penetration.

Gazumping : describes the process whereby a seller who has already accepted one buyer's offer
then goes on to accept a higher offer, pushing the first buyer out of the picture

Gazundering : where the buyer has the upper hand and threatens, just before contracts are
exchanged, to pull out of a house purchase unless the price is reduced.

Gearing : a highly geared company is one where a large amount of money has been borrowed
relative to the company's equity.

General manager : alternative term for chief operating officer (coo).

General partnership : unincorporated business with two or more co-owners called general
partners. All general partners take active part in the firm's management, are jointly and severally
liable for the firm's obligations, and are bound by the actions of the other general partners. See
also limited partnership.

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Generic market : a market consisting of buyers with similar needs that are satisfied by sellers
in many different ways.

Gilts : when the government wishes to borrow money, it issues loan stock, known as gilts.

Gold : a refuge for investors when panic sweeps the markets.

Golden handcuffs : what firms offer executives to stay in their job.

Golden handshake : what many executives receive despite poor performance.

Golden hello : what executives might be offered to tempt them to join a company.

Golden rule : the cost of building new roads, hospitals and schools would be financed by tax
revenue rather than a reckless rise in the national debt.

Government sponsored entreprise : a market consisting of buyers with similar needs that are
satisfied by sellers in many different ways.

Green marketing : promotional activities aimed at taking advantage of the changing consumer
attitudes toward a brand. These changes are increasingly being influenced by a firm's policies
and practices that affect the quality of the environment, and reflect the level of its concern for
the community.

Greenback : a colloquial name for the us dollar.

Gross domestic product : gross domestic product (gdp) is a key government statistic and
provides a measure of the uk's total economic activity.

Gross national product : gdp plus profits, interest and dividends received from abroad by
british residents, and minus those profits, interest and dividends paid from the uk to overseas
residents.

Ground rent : money paid to a landlord by a leaseholder.

Guaranteed annuity rate : a promise made by pension providers to pay a minimum retireme nt
income to pension policyholders.

Guarantor : if a lender thinks there is a risk you will not be able to meet your repayments, they
may ask you to provide a guarantor.
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 H
Half year : british listed companies must produce profit figures at the half-year stage, that is,
six months into their financial year.

Hang seng : the main index of share prices on the hong kong stock exchange.

Hedge funds : hedge funds are international investment vehicles which are estimated to be
responsible for up to half the daily turnover on the london and new york stock markets.

Home reversion plan :these are available to people aged 60 and over, and are designed to allow
you to free up the cash held in your home.

Horizontal merger : a merger of two companies at the same production stage in the same
industry.

Hostile takeover : a hostile bid is when a takeover is unwelcome or the terms are unacceptable,
and the board advises against agreeing to the bid.

House price surveys : there are various house price surveys, which seem to come out every
few days and often contradict each other.

Hyperinflation : rapid, out-of-control inflation at double digit rates per month and more,
usually occurring only during wars and periods of severe political instability.

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 I
Income statement : an annual summary of income and expenses of a given business in order
to determine the net income (profit) of the business.

Income tax : if you earn money in any capacity, you will probably pay income tax on it.

Independent financial adviser : an ifa will give you advice about which financial products
you should be buying.

Individual output : manufacturing output plus sectors such as mining (including oil and gas
production) and utilities (water, electricity).

Individual savings account : a type of account introduced by the government as a means of

encouraging more people to save for the future.

Inflation : inflation is when prices rise. Deflation is the opposite - price decreases over time -
but inflation is far more common.

Inflation measures : for measuring inflation before 1914 the office for national statistics has a
yardstick that goes back to 1750 based on sources including the cost of wheat, account books
for alms houses and naval purchasing records.

Inheritance tax : because of rising property prices, this tax - payable by your heirs on the value
of your estate - is affecting more people.

Insider trading : the trading of shares based on knowledge not available to the rest of the world.

Institutional investor : a professional money manager who invests on behalf of private

investors via their pension and life insurance funds.

Interest-only mortgage : a home loan where your monthly payments only go towards paying
off the interest on your loan.

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Interim : companies which are quoted on the stock exchange must give shareholders regular
information on how the company is performing.

Investment trust : a company quoted on the stock exchange that exists only to invest in other
companies.

Invisible hand : adam smith's theory that free markets allocate resources efficienctly through
the individual pursuit of self-interest.

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 J
Joint account : a bank account held in the names of two or more people, often a couple.

job order cost sheet : The document that represents the costs it requires to perform a
particular job.

job order system : The method of allocating costs to each job listed for production.

job promotion : The advancement of an employee within a company position or job tasks. A
job promotion may be the result of an employee's proactive pursuit of a higher ranking or as a
reward by employers for good performance. Typically is also associated with a higher rate of
pay or financial bonus

job restructuring : Changing the work content of a job so that the employee derives greater
satisfaction from it. It is accomplished either by adding more tasks of similar nature
(horizontal restructuring) or by transferring tasks from the next level (vertical restructuring).

job statisfaction : Contentment (or lack of it) arising out of interplay of employee's positive
and negative feelings toward his or her work.

joint account : Bank account in the name of two or more individuals (account owners) who
jointly (equally) share its concomitant rights and liabilities.

joint agent : Real estate agents who are jointly employed to assist a buyer reach a deal. All
commissions earned from the ventured are shared by all parties.

joint economic committee: A congressional committee created by the Employment Act of

1946, charged with monitoring economic conditions and making economic policy
recommendations.

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 K
Keynesian economics : named after the british economist, john maynard keynes, whose central
insight was that changes in government income and spending are the most effective instrume nt
of government economic policy.

key business issue : The highest-priority problems that are affecting a business, or the
problems which are creating the largest negative impact.

key business requirement : Measurable changes that must be achieved in order to solve the
problems currently facing an organization

key employee : Employee that is considered to be a key stakeholder in the operation of a

company.

key performance indicator : Key business statistics such as number of new orders, cash
collection efficiency, and return on investment (ROI), which measure a firm's performance in
critical areas

key punching : Entering data into a computer by using a keyboard or keypad. In the era
before the PCs, key punching referred to actual punching of holes in cards (called punch
cards) or paper tape to issue commands or store data in a mini or mainframe computer.

key splitting : Dividing a code number or decryption algorithm into two or more parts so that
no part in itself can be used without reconstructing the key by uniting all its parts.

key success factors : The combination of important facts that is required in order to
accomplish one or more desirable business goals

key task analysis : Study of a set of operation(s) to determine the level of performance
required, time taken, the quality of the outcomes, and quality of the total job or project.

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keynesian unemployment : Situation where low wage-rates should result in higher
employment levels, but don't because the economy is in recession and the employers are
facing low demands for their goods and services.

KOF economic barometer : A composite indicator published monthly that estimates the
GDP growth rate of the Swiss economy

kurtosis : Measure of the tails of a frequency distibution when compared with a normal
distribution. Similar to skewness, kurtosis measures the tailedness of the probability distributio n
as opposed to the peakedness in the center.

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 L
Laissez-faire : the doctrine or system of government non-interference in the economy except
as necessary to maintain economic freedom.

Leasehold : a leasehold property is leased from the freeholder for a specified period of time.

Leveraged buyout : the acquisition of a company using borrowed funds

Liquid asset : an asset which can be converted easily into cash.

Lloyd's of london : corporate members include investment institutions and internatio na l

insurance companies.

Loan-to-value : loan-to-value is the ratio between the size of a mortgage and the mortgage
lender's valuation of the property.

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 M
Macroeconomics : the part of economics which looks at economies as a whole, rather than
dealing with the actions of individuals or groups

Managed fund : managed funds can either be actively managed - where a fund manager buys
and sells holdings with the intention of maximising gains and minimising losses - or passively
managed, where the manager simply uses a computer programme to track the performance of
a given market index.

Manufacturing output : a leading indicator of economic growth.

Margin : if a company produces a gross profit of £1m on turnover (sales) of £10m its profit
margin is 10%.

Median : to find the median, line up all the numbers concerned in order. The middle number
(or the average of the two middle numbers) is the median.

Merger : the combining of two or businesses on a more or less equal footing. In the uk, approval
by the competition commission may be required.

Microeconomics : microeconomics takes a close up look at decisions taken by individuals and

companies, without worrying about the wider economy.

Minimum wage : nearly all uk workers have a legal right to a minimum level of pay.

Monetarism : an economic doctrine that stressed the importance of the money supply as an
instrument of economic policy.

Monetary policy committee: in almost his first action as chancellor, gordon brown set up a
monetary policy committee at the bank of england to decide the level of interest rates.

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Money supply : a measure of the amount of money in circulation. Various measures of money
supply exist.

Monopoly : lots of industries were previously state monopolies: the gas industry had only one
supplier - british gas; british telecom was a government monopoly.

Mortgage broker : an intermediary who offers advice on choosing the right mortgage and
helps you compare different deals from different lenders.

Mortgage indemnity protection : when buying a house with a small or zero deposit, mortgage
companies may charge a one-off fee, often amounting to several thousand pounds, in the form
of mortgage indemnity protection or guarantee.

Mortgage term : the period over which you agree to repay your mortgage. In the uk this is
typically 25 years.

Mutual : a company owned by its members or depositors.

Mutual fund : the american name for a unit trust.

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 N
Naked short-selling : when the seller does not obtain the shares within the required time frame,
the result is known as a "fail to deliver".

Nasdaq : the market is home to many hi-tech companies, including microsoft.

National debt : the national debt is the total amount of government borrowing still outstanding,
owed to individuals and institutions.

National economic council : the 19-strong national economic council, chaired by the prime
minister, was set up on october 3.

National institute of economic and social research : the niesr produces an unofficial estimate
of uk gdp one month before the official figures come out. They are highly respected.

National insurance : national insurance is a form of tax which everyone in work must pay in
order to qualify for benefits, including the state pension.

Negative equity : when the market value of an asset is less than what you paid for it.

Net asset value : a key measure in assessing investment trusts.

New york stock exchange : the nyse can trace its origins back to 1789 when george washingto n
authorised the issue of $80m in government bonds to help finance the costs of the american war
of independence.

Nikkei 225 : the nikkei 225 is the leading index for the tokyo stock market.

Nominal interest rate : an interest rate which has not been adjusted for inflation.

Nominal values : nominal values do not account for inflation.

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Non-executive director : a director of a company who is not involved in the day-to-day running
of the business but should help the company by offering an independent view on areas such as
performance, standards and strategy.

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 O
Occupational pension scheme : the type of scheme offered by employers

Office for national statistics ons : the office for national statistics (ons) is the uk governme nt's
statistical unit.

Office of fair trading oft : the oft is britain's consumer and competition authority, which aims
to protect consumers from unfair commercial practices.

Offshore account : a bank account whose funds are managed outside the uk, often with
favourable rates of taxation.

Old lady of threadneedle street : a name for the bank of england dating back to the 18th
century.

Oligopoly : a market structure with just a few firms controlling a high percentage of total sales,
such as car manufacturing.

Open-market operations : the buying and selling of government securities on the financ ia l
markets.

Operating profit /lost : the profit or loss a company makes from its principal trading activity
and before any exceptional items are taken into account.

Option : an option is the right, but not the obligation, to buy or sell securities at a fixed price
within a specified period.

Ordinary residence : if you are resident in the uk year after year, you are treated as ordinarily
resident here.

Ordinary share : a fixed unit of a company's share capital.

Organisation for economic cooperation and development : organisation based in paris which
promotes economic and social cooperation among its 30 members.

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Organisation of petroleum exporting countries (opec) : a cartel consisting of most of the
world's oil exporters.

Overdraft : an overdraft allows you to borrow an agreed amount of money on top of your bank
balance.

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 P
Paye as you earn paye : tax is collected at source for those working for an employer through
the pay as you earn (paye) system.

Percentage change : to find the percentage change, divide the absolute change by the starting
number and multiply by 100.

Perment interest- bearing shares pibs : permanent interest-bearing shares are effectively a
form of subordinated debt issued by building societies which they can count towards their
capital for capical adequacy calculations.

Personal loan : a personal loan is a way of borrowing money from a bank, building society or
other financial service provider.

Poison pill : a provision made by a company to deter takeover bids.

Portfolio : a set of securities held by an investor.

Pound : the standard monetary unit of the uk, divided into 100 pence.

Poverty trap : a situation faced by low income households, when an increase in wages leads
to a decrease in disposable income

Precipice bonds : high income bond, stock market income bond, premier bond, extra income
and growth plan - they all sound like a quick route to big returns.

Preference shares : shares in a company which pay a fixed dividend but which do not usually
carry voting rights.

Preliminary announcement prelim : produced shortly after the end of the company's financ ia l
year and containing profits and other information.

Premium bonds : set up in 1956 and run by the national savings, premium bonds offer no
interest or capital gain.

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Price to earnings ratio : the most common measure of how expensive a stock is.

Privatisation : the process of moving state-owned assets into the private sector and one of the
defining characteristics of the thatcher era.

Producer price index : a measure of inflation in goods bought and manufactured by british
industry.

Profit and loss accounts : shows the final outcome of the firm's trading over the past financ ia l
year.

Profit participating deferred shares : profit participating deferred shares (ppds) are capital
instruments that building societies will be able to issue to strengthen their balance sheets.

Profit : in simple terms, profits, or earnings, are the excess of revenues over all costs.

Public company : a company whose shares are avaliable through a stock exchange.

Purchasing managers' index pmi : the cips with rbs produces monthly purchasing managers'
index (pmi) reports, which cover manufacturing, construction and the service sector.

Purchasing power parity : purchasing power parity is a way of adjusting gdp to take account
of the fact that the same good varies in price between countries, with a us dollar buying four or
five times as much in china or india as it does in america.

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 Q
Quantity easing : quantitative easing is what non-economists call 'turning on the printing
press'.

Quantity theory of money : originally proposed by david hume in the 18th century, the
quantity theory of money states that the price level is proportional to the quantity of money in
the economy.

Quarterly report : us companies have to issue financial reports every three months.

Quota : a limit set by a country's government on the amount of a product or commodity that
can be imported to or exported from that country.

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 R
Rally : a rise in prices in a financial market after a fall.

Rate of return : the annual income from an investment as a percentage of the origina l
investment

Ratings agencies : to help investors assess the difference in risk associated with different bond
issues, credit rating agencies exist to classify bonds according to risk.

Real estate investment trusts : part of gordon brown's plan to encourage investment in
property in the uk.

Real interset rate : the rate of interest, less the current rate of inflation.

Real values : real values are inflation-adjusted.

Regressive tax : a tax where the rate decreases as income increases.

Regulatory news service rns : the service used by the london stock exchange to publish
company results, share issues, changes in the board of directors and other items which may
affect the price of shares.

Retirement age : normal retirement age in the uk is 65 for a man and 60 for a woman.

Reverse takeover : when a smaller company buys a larger one.

Rights issues : a rights issue - or cash call - is a way for companies to raise cash from
shareholders.

Royal mint : the organisation that has manufactured english coins since the 16th century.

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 S
Second-lien loan : a second-lien loan is essentially a second mortgage on a property, usually
with a higher rate of interest than the first.

Securities and exchange commission : the government agency which regulates markets in the
us.

Security : a financial asset such as a share or bond.

Self-certification mortgage : although about 14% of the uk population is self-emplo yed,

mortgage lenders still tend to be suspicious of anyone who cannot prove their earnings via pay
slips.

Self-invested personal pensions(sipps) : sipps, or self-invested personal pensions, allow you

to take control of your retirement investments.

Self-select isa : a self-select isa involves taking the existing isa wrapper and choosing either
individual shares or a combination of funds to go in it.

Serious fraud office sfo : the body responsible for investigating and prosecuting serious frauds
in the uk.

Share index : an index which tracks the value of a number of prominent shares on an exchange
to give an idea of the performance of that exchange as a whole.

Share options : often an issue in "fat cat" pay.

Shareholder : an owner of shares in a limited company. In the us, called a stockholder

Short selling : selling securities, currencies or commodities that the seller does not own.

Siv : special investment vehicles have become a problem during the credit crunch.

Soft commodities : commodities other than metals. That is, coffee, sugar, cocoa and so on.

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Sonia : sterling overnight interbank average rate - a proxy for the market's interest rate
expectations. The rate is an index that tracks sterling overnight funding rates for trades that
occur in off hours

Split capital investment trusts : split capital investment trusts are investment trusts that issue
more than one type of share .

Spot market : in a spot market, currencies are bought and sold for immediate delivery (in
practice, in two days' time).

Square mile : colloquial name for the commercial area of the city of london, which traditiona lly
occupies the square mile north of the thames between tower bridge and waterloo bridge.

Stakeholder pensions : low-cost retirement savings plans designed to encourage people on

average incomes to save for the future.

Stamp duty : when you buy a share, you have to pay stamp duty.

Stock : the american name for an ordinary share.

Stock exchange : a market where securities are bought and sold and prices are set by supply
and demand.

Supply and demand : fundamentally economics is about the allocation of scarce resources
based on supply of, and demand for, goods and services.

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 T
Takeover : when one company tries to take over another, it will usually offer a price higher
than the current market price, so shareholders of the target company stand to make instant
profits.

Takeover bid : an offer made to the shareholders of a firm to buy their shares for a specified
price

Takeover panel : the body which polices takeovers in britain according to the takeover code.

Tarp : troubled asset relief programme - the us government's controversial $700bn bail- out
package for the financial industry which allows the us treasury to buy toxic mortgage debts
from banks.

Tax haven : a country or area with low tax rates where companies may hold investments to try
to minimise the amount of tax they have to pay.

Teaser rate : also known as an introductory rate. Borrowers are offered a discount on the rate
of interest on a mortgage, credit card or loan. The cut-price rate is offered for a set period only,
after which repayments rise to the lender's standard rate.

Term assurance : the cheapest and simplest form of life insurance. It is a straightfor ward
insurance policy with no investment element and it pays out a lump sum if you die within a
specified period - 10 years or 25 years, for example.

Terminal bonus : increasingly popular with life assurance with-profits funds.

The london stock exchange : is one of the world's oldest stock exchanges.

Tracker funds : rather than paying for the expertise of a particular manager, you pay a lower
fee for a computer to run a fund which exactly mirrors the performance of a stock market index,
up or down, for as long as you remain invested.

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Trade balance : the accounts setting out a country's trading position.

Treasury : the uk government department responsible for the management of the economy and
the country's financial policies.

Turnover : the total sales of a company over a stated period.

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 U
Underwriter : the total sales of a company over a stated period.

Unit trust : unit trusts invest money in the stock market on behalf of many private investors
who have all pooled their funds so that it can be invested on their behalf by an investment expert
- a fund manager.

Unquoted shares : shares in some companies, often smaller ones, are not traded on any stock
exchange.

V
Value added tax vat : vat is a tax paid on most goods and services in the uk.

Variable rate mortgage : the standard product offered by lenders.

Vertical merger : a merger between two firms in the same industry but at different production
stages.

Volume : on the london stock exchange, the number of shares traded in the day is called the
volume.

Vulture funds : vulture funds prey on hapless countries who lack funds for basic health care
or education, let alone paying millions of dollars to overseas investors.

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 W
Wall street : the street where the new york stock exchange is situated.

White knight : a company that is the target of an unwelcome takeover bid may search for a
white knight, an alternative bidder that is acceptable to it.

Whole-of-life policy : a life assurance policy that pays a specified sum on the death of the
individual covered. It guarantees a payout for dependants.

Windfall tax : a one-off tax imposed by a government on the 'excess profits' of companies.

Without-profits policy : a life assurance or pensions policy that does not share in the profits
of the company that issued it.

Write down, write off : many major banks have been writing down the value of mortgage -
backed assets because they are no longer worth the figures at which they are shown in the books.

Y
Yen carry trade : open global capital markets allow investors to park their money - albeit
sometimes only briefly - wherever they like.

Yield : the income from an investment.

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 Z
Zero interest rates : central banks around the world have been slashing interest rates in a
desperate attempt to get people and businesses spending again.

Zombie funds : with-profits funds that have closed to new business, so called because they
either neither fully alive nor dead.

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Conclusion:

Business Glossary increases your return on data by providing a common business

vocabulary across the organization. This vocabulary removes ambiguity from conversatio ns,
reduces errors, speeds up project delivery cycles, and enables the delivery of trusted data in
support of informed business decisions and processes.

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