Stock Dictionary

Links to Stock Dictionaries (German language): www.boerse-online.de www.faz.net www.s-broker.de
Ad-hoc	Under the German securities law, public limited companies are required to publicly disclose any information impacting on securities prices immediately. This is usually done in the form of ad-hoc announcements pursuant to §15 of the German securities law. The purpose of ad-hoc announcements is to ensure that all market participants are equally well-informed. The content of the announcement is the responsibility of the company in question.
Annual financial statements	Annual balance sheet and profit and loss account to be prepared by the managing board and controlled by the supervisory board and certified public accountants. Requirement under commercial law.
Annual General Meeting (AGM)	The annual get-together of shareholders in a joint stock company. It is also attended by the company's executive and supervisory boards. The AGM gives the shareholders an opportunity to exercise their rights: They select members for the supervisory board, vote on the distribution of profits, on the stewardship of the executive and supervisory boards, and amendments to the company statutes (capital increases, the issue of convertible bonds etc.) At companies with bearer shares, shareholders are notified and invited to the AGM by their depositary bank. Companies with registered shares have to invite their shareholders themselves, provided they are entered in the share register at a deadline of about six weeks prior to the AGM.
Annual report	Report drawn up annually containing the annual financial statements, the reports from the management board and supervisory board and a proposal on the allocation of the profit.
Bear	The American term bear is a symbol for falling prices. The opposite is the term bull which stands for rising prices.
Bonus-share	The shareholder receives bonus-shares if a company issues additional shares to turn capital or retained earnings to nominal capital. The shareholder owns more shares but the single shares are less valuable.
Bookbuilding	A method of collating all incoming applications to buy shares to reduce the risk of issuing shares on the stock exchange at a price that does not conform with market developments. The actual issue price is decided during a bookbuilding phase on the basis of a price margin, which is calculated after talks with major investors.
Bull	In stock exchange parlance a symbol for rising prices. Its opposite, the bear, stands for falling prices.
Cash Flow	A measure of a company's financial and earnings potential. It is calculated from inflow and outflow of cash and cash equivalents during the financial year.
Cash Flow Return on Investment (CFROI)	A metric used in investment decisions. It is based on the expected discounted cash flow in relation to invested capital.
Cash Value Added (CVA)	A measure of asset creation. It is derived from cash flow and determines the shareholder value created - or net earnings after deduction of capital costs of a business unit.
Chart analysis	Method of keeping track of changes in a share price. Using a curve precisely plotting share price developments in the chart, an analyst can see how the price has reacted in specific situations in the past, and use the information to forecast future price developments.
Consortium banks	Bank that prepares and accompanies an IPO (initial public offer).
DAX® index	The DAX® acts as a guide to overall market fluctuations. It is based on the prices of 30 blue chip shares of leading German companies from diverse industries.
Direct brokerage	Shares and other securities can be purchased more cheaply from a direct bank without individual consulting service. An alternative for experienced investors.
Dividend	The share of a company's profit paid to a shareholder. Dividends are usually expressed as a percentage of the nominal value of the shares. The amount is decided by the Annual General Meeting on the basis of proposals put forward by the company's executive and supervisory boards. Dividends are paid - normally through a depositary bank - on the day after the AGM on shares a shareholder possesses on the day of the AGM.
EBIT	Earnings before interest and taxes. Key figure for the assessment of companies. This is the profit result before tax and interest expenditure.
EBITDA	Financial indicator denoting earnings before interest, tax, depreciation and amortization on tangible and financial assets and on securities held as current assets as well as amortization on goodwill from equity method investments.
EPS	Earnings per Share.
Equity method	Accounting method recording investments in associated companies or joint ventures according to the investor's share of net assets.
Equity ratio	A financial measure showing the share of equity or own capital and reserves as a proportion of total assets.
Face value	The monetary amount printed on a security. A specification of the share held in the stock capital of a publicly held company. This price will generally be significantly different from the market value.
Fixation	Setting of the price for a security at a particular point of time.
Goodwill amortization	Method of depreciation the amount paid for goodwill on the acquisition of a new business. Goodwill is an intangible asset reflecting the market position, brand, know-how and image of a company. It is assessed by determining the difference between the present value of the assets/debts of a company and the price paid to acquire it. It is amortized applying the straight-line method over its estimated useful life
Group of consolidated companies	Those subsidiaries in the Group, which are included in the Group's consolidated financial statements.
Insider	A person that has access to inside information. Insiders are prohibited of making use of their insider knowledge.
Issuer	Issuers of securities on the stock-exchange are generally private-sector public liability companies or public corporations issuing their shares.
Issuing price	The price at which a security is issued.
Margin	The amount of the deposit required to set up a future position.
Market capitalization	The monetary amount obtained from the price of a share multiplied by the number of issued shares.
Market price	Price of a share determined by supply and demand.
NASDAQ	Stock exchange in the USA (National Association of Securities Dealers Automated Quotation System). With over 5,400 shares traded it is the greatest stock exchange.
Net indebtedness	Financial indicator showing long-term financial debt less liquid funds and current asset securities.
Nominal capital	In the association articles defined capital. This paper also determines in how many shares it is divided. The company issues shares amounting to the nominal capital.
Non-par shares	Shares which do not specify any value in the relevant national currency, but rather a certain fraction of the stock capital of the publicly held company.
Operating result	Profit term. It shows the profit from operating activities less book profits (and losses), write-back (or allocation of provisions), currency losses on valuation at the balance sheet date of long-term financial liabilities, and other periodic expenses and income.
Options	Derivative financial products. The buyer of an option is speculating on a certain price performance trend into the future. He is holding an option right. The issuer is obliged to perform a predefined action if requested by the holder.
Option right	Right to exercise an option held by the party holding the option in case of a capital increase. The right can be sold to the stock exchange by the shareholder.
Oversubscription	The total purchase offers exceeds the value of the securities issued. Issuing then takes place on a percentage basis (in proportion to purchase offers received) or by drawing of lots.
Par Price	The moment when the price printed on the document exactly corresponds with the price of the security.
P/E-ratio	Price-earnings ratio.
Pre-market	Transactions with securities before the official start of trading on the Stock Exchange.
Profit and loss statement	Comparison of earnings (i.e. sales revenue, changes in stock) and expenditure (i.e. wages, salaries, depreciation) for the financial year.
Quotation	Statement of the price of a security at a particular point of time.
Registered shares	Holders of registered shares have their name, address, profession and number of shares entered in the share register kept by the company: The details are transferred to the register by the depositary bank. Unlike holders of bearer shares, it is not the depositary bank but the company that invites registered shareholders to the annual general meeting and mails them admission cards. General proxy voting rights are not applicable with registered shares: That means - the shareholder must appoint a bank or representative to act as proxy and vote in his stead in accordance with the shareholder's instructions.
Retention	Induction of withheld gains to equity. Method to strengthen the financial power of a compamy.
Return on equity	A financial term indicating the net profit on equity capital employed.
Return on investment (ROI)	Interest of the financial investment.
Share	A share is a type of security. The owner of a share owns parts of a publicly held company and is therefore a stockholder in that company. Share ownership is associated with certain stockholder's rights and obligations.
Share buyback	Practice of a company to acquire their own shares in order to let the capital flow back to the shareholders.
Shareholder Value	Benefit for the shareholder. A shareholder value oriented company policy aims at a fair rate of return for its shares.
Share Identification Number/ Security Identification Number	Identification number for securities (shares, investment funds etc). The six-digit number is intended to facilitate share trading.Share index An index number based on the prices of a parcel of representative shares. Among the better known share indices are the German DAX (Deutscher Aktien Index), the FAZ Index (Index of the Frankfurter Allgemeine Zeitung), the MSCI, the Dow Jones (USA), the Nikkei Index (Japan) and the Financial Times Ordinary Share Index (FTSE).
Share register	Electronic record listing the names of holders of registered shares. The depositary banks communicate any transfers electronically, and are solely responsible for ensuring the entries in the register are correct. Only shareholders, whose shares are listed in the share register on a specific date, are entitled to exercise voting rights at the Annual General Meeting (AGM). That deadline is usually about six weeks prior to the date of the AGM.
Stock price	The market price of a share, governed by the supply and demand on the Stock Exchange.
Subscription	Undertaking to buy a particular number of securities in the context of a new issue. In most cases full allotment is not possible, owing to oversubscription.
Turnaround	When it appears that the prices of securities will not fall any further, creating the possibility of profits, this is referred to as a turnaround situation.
Warrant-linked bond	Form of bond with additional rights. The capital investor has the possibility of acquiring, within the term of the option, a certain number of shares at a preset price. There are warrant linked bonds with option and without option, since the bond can also be traded without bond.
Withholding tax	Collected immediately on a tax debt becoming payable. Mostly deducted directly by the bank posting the transaction.XETRA Computerized trading system of the German stock exchange introduced in 1997. The transactions are not conducted in person, but as buy and sell orders communicated via computer systems.
XETRA	Computerized trading system of the German stock exchange introduced in 1997. The transactions are not conducted in person, but as buy and sell orders communicated via computer systems.