A  Glossary

Property and items of value owned by a person or business. The primary classifications of assets are:

Current assets cash and other liquid instruments, including accounts receivable, that can be converted to cash within one year at maximum;

Long term assets plants, equipment, real estate and other capital assets, net of depreciation;

Prepaid and deferred assets expenditures for future costs or expenses, such as insurance, interest or rent, that are set up as assets to be amortized over an applicable period;

Intangible assets assets with a determined value, but which may not be scalable, such as goodwill, patents, copyrights, and brand name recognition;

Annual Report

An audited report of corporation's year end financial results. The report contains detailed information related to the company's financial condition, legal liabilities and plans for the upcoming year.

Profiting from the difference in price of the same security traded in more than one stock market.

A method of settling a dispute by utilizing an impartial individual or individuals. 

B Glossary

Balance Sheet

A condensed financial statement showing the nature and amount of a company's assets, liabilities and capital on a given date. In Riyal amounts the balance sheet shows that the company owned, what it owed, and the ownership interest in the company of its stockholders.

Bid and Ask

Collectively called the "quote", the bid refers to the highest price a buyer is willing to pay for a stock, while the asked is the lowest price a seller will accept.

Book Value

The book value of a stock is determined by adding up all of a company's assets then deducting all of its debt and liabilities, including the liquidation price of any preferred issues. This sum is then divided by the number of common shares outstanding and the result is book value per common share. Book value of a company's assets or of a security may have little relationship to the market value.

An agent who acts as an intermediary between buyer and seller in trading securities, commodities, or other property. He charges a commission for this service.

An investor who believes that a share or the overall market will fall.

Bear Market 

A market in which price of securities are declining.

A person who receives a benefit, such as the income of a trust or proceeds from an entity.

Bid is the market makers' price to buy a security from the investor.

Brokerage is the commission charged by the broker.

The entity who has placed an order for the purchase of securities.

C  Glossary

Total amount of various securities issued by a corporation. Capitalization may include bonds, debentures, preferred and common stock, and surplus

Cash Flow

Reported net income of a corporation plus amounts charged for depreciation, depletion, amortization, extraordinary charges to reserves, which are bookkeeping deductions and not paid out in actual Riyals. Hence, it is the cash received from investments or generated by a business, within a period of time, less any cash expenditure.

Common Stock

Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.

Cash Dividend 

Dividend paid in the form of cash to the shareholders of a company.

Clearing refers to the process by which the mutual indebtedness between buyers and sellers is settled.

Closing Price 

The trade price of a security at the end of a trading day.

The fee paid to a brokerage firm to execute a trade or manage an investment portfolio.

A fungible, generic item such as copper, oil, cocoa and so forth that can be bought and sold pretty much on quantity alone.

The process of combining shares that have a low face value into one share of higher value is known as consolidation.

Counter party 

When an entity enters an order, any other entity with an order on the opposite side is referred to as the counter party.

Current Assets 

Value of cash, inventories, marketable securities available for conversion into cash in less than one year.

Current Liabilities 

The amount owed for debts due within one year.

An entity responsible for managing the property of another. 

D  Glossary

Debit Balance

In a customer's margin account, that portion of the purchase price of stock that is covered by credit extended by the broker to the margin customer.

Normally, charges against earnings to write off the cost, less salvage value, of an asset over its estimated useful life. It is a bookkeeping entry and does not represent any cash outlay nor are funds earmarked for the purpose.

The payment designated by the Board of Directors to be distributed pro rata among the shares out-standing. For preferred shares, the dividend is usually a fixed amount. For common shares, the dividend varies with the fortunes of the company and the amount of cash on hand, and may be omitted if business is poor or if the directors determine to withhold earnings to invest in plants and equipment. Sometimes a company will pay a dividend out of past earnings even if it is not currently operating at a profit. Yet, in Qatar, we have the practice of common stock.

Day Order 

A day order, as the name suggests is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets cancelled automatically at the end of the trading day.

Dividend Yield  

A stock's dividend expressed as a percentage of the share price.