Initial Public Offering (IPO) – where a private company is floated on a stock exchange for the first time, offering shares to the public.
Leverage – this entails a firm using borrowed money —bonds or bank debt — to invest and to generate a return on that investment.
Liquidity – a company’s ability to turn its assets into cash without causing a major change in the assets’ price.
Macroeconomic factors – factors focused on the performance of economies, including inflation, gross domestic product (GDP), inflation or deflation,
and unemployment.
Market capitalisation – a measure of a company’s value, calculated by multiplying its current share price by the total number of outstanding shares.
Maturity of a bond/ gilt – the date at which a debt instrument such as a bond or gilt matures, and the borrower must pay back the debt in full to the creditor.
Mergers and acquisitions (M&A) – in a merger, two companies join together to create a new organisation. In an acquisition, one company takes over another.
Net yield – the annual dividend per share, divided by its share price.
Organic growth – company growth that is achieved from its existing business (e.g. sales growth) without mergers or acquisitions (inorganic growth).
Price/ earnings ratio – the ratio of a company’s share price to its earnings per share. It is used as a measure to determine if a company’s share price could be over or undervalued.
Research and development (R&D) –innovation activity by companies to try to generate a competitive advantage; this could include launching new products or services.
Total addressable market – the total possible market share for a company, assuming it theoretically had a 100% share. Used to calculate the scale of potential revenue opportunities.
