Baath Party
Arab political party advocating the formation of a single Arab socialist nation. It has branches in many Middle Eastern countries and has been the ruling party in Syria and Iraq.
Bad Credit Loans
Having bad credit used to mean it was very difficult to be approved for a loan. However, within the last decade, there has been an increase in availability of sub-prime borrowing opportunities for many types of loans. These can include mortgages, auto, secured and personal loans. Approximately 33% of private loans are bad credit loans.
Loans for bad credit are called Sub-prime loans. The difference between Sub-Prime and Prime loans is the interest rates which are offered. People with bad credit are a higher risk for a default such as late payments or missing payments. Lenders must protect themselves from loss with borrowers who may be high risk. There are usually fees associated with bad credit loans such as obtaining the loan, higher down payment, and sometimes early payment penalties.
If a bad credit loan is utilized properly, it can be a valuable tool for repairing credit and improving finances. However, a rise in fraudulent and predatory loans taking advantage of people desperate has risen in the last few years, which can further damage people's bad credit and finances. When pursuing a loan, it is always best to take time to do plenty of research, and be sure to deal with a reputable lender.
It is possible to get a mortgage with bad credit, but usually people end up borrowing more than they can reasonably afford, which leads to foreclosure. A better course is to get a smaller house with a more inexpensive loan and work toward better credit so that a bigger loan can be sought in the future for the dream home of choice.
An auto loan with bad credit will usually have a high interest rate, which may not make it worthwhile. They may also require some sort of collateral, sometimes the car itself. Instead, it might be better to drive the current car for a while longer, or buying a used car for less money.
Debt consolidation is an option to personal bills. This can combine credit cards, bank loans, medical bills, or other types of smaller expenses. The interest rates may be high, though a single payment can make finances more manageable while repairing credit.
Cash advances, or Payday loans have less to do with credit rating, and is rather based on income. Generally these loans are for smaller amounts of money up to about $2,000. These should be avoided, and used only in extreme emergencies, as they have the highest interest rates; well over 100%!
As previously stated, a bad credit loan can be a benefit if used properly. All documentation should be read, including the "fine print". Never jump into anything, and always ask questions if something is not fully understood. Be realistic about the amount being borrowed and take into consideration the full amount of the loan, including monthly payments, interest rates, and any associated fees. Staying committed, and making payments on time and in the full amount will repair credit.
Balance Sheet
The Balance Sheet or the statement of financial position reveals the individual's or company`s assets, liabilities, and owner's equity. The balance sheet equates the assets to the sum of the liabilities and the owner's equity. In other words, the assets are balanced with the financial obligations and the equities. The assets are divided into current and fixed or long-term assets. The category of current assets contains accounts receivable, cash and cash equivalents, inventory, prepaid expenses, and short-term investments. The fixed assets refer to real estate, machinery, tools, and buildings. Other long-term assets include intangible assets, investment in real estate, biological investment (asset in living stock), financial assets, and investment via the equity method.
Liabilities refer to the financial obligations of the entity to outside parties. They may give rise to the transfer of assets or to the provision of different services. Liabilities are also divided into current and long-term liabilities. The category of current liabilities comprises of financial obligations that are payable within one year. These are short term borrowings, wages, taxes, and others. The long-term liabilities include obligations that are due at least one year after the balance sheet has been prepared. They include long-term bond repayments, long-term leases and product warranties, pension obligations, etc.
The owner`s equity represents the initial capital that is invested in the entity. Then, the equity also refers to the funds that are owed to the company owners after the payment of liabilities. In other words, it is the owner`s interest in the business entity. The entity comprises of tangible and intangible assets. It includes assets such as preferred and treasury stock, capital surplus, retained earnings, and others. The term shareholder`s equity is used if the owners are shareholders. The investors will be interested in both, changes in the equity and increases or decreases in the value of their individual shares. Finally, the market value of the shares does not match the owner`s equity per share. The market value is determined by factors such as cash flows, profits, and other components of the accounting statements.
Barrels Per Day
Production of crude oil and petroleum products is frequently measured in barrels per day, often abbreviated bpd or bd. A barrel is a volume measure of forty-two United States gallons. Conversion of barrels to metric tons depends on the density of a specific product. About 7.3 barrels of average crude oil, or about 7 barrels of heavy crude oil, weigh 1 metric ton. Light products, such as gasoline and kerosene, average close to eight barrels per metric ton.
Basic Point
Basic Point is 1/100 of 1%. For example if a news says that the central bank increased the interest rate with 25 basic points from 5%, this means that the new interest rate is 5.25%.
Bear
The Bear term refers to investor who believes that certain market is in decline or will decline. For example some financial analysts are bearish on gold and precious metals, other are dollar bears.
Bear Market
Bear markets refer to market developments that denote a continuous decline in the price of securities. The investors expect losses and the pessimistic attitudes thrive. In should be noted that Bear markets differ from corrections which last no longer than two months. In contrast to corrections, the bear markets do not usually offer good entry points. Moreover, it is difficult to predict when the bottom will be reached.
The bear market appears when the state of the economy starts to decline. There is a considerable drop in most of the stock prices. This substantial decline is typically due to decreases in the profits of corporations. Alternatively, the bear market starts after corrections of over-evaluation. This happens when the value of stocks had been too high and now decreases to more acceptable levels. Scared investors will sell their securities and cause a further drop in the price level. This herd behavior becomes worrisome for other investors who also decide to sell their stock. The whole process turns into a vicious cycle.
In general, the value of the securities may drop suddenly or over an extended period of time. The final result will be the same: the quoted value of securities declines. Two major conclusions may be drawn with regard to bear markets. Firstly, the bear market affects adversely only those investors who plan to sell their stock at the very moment. Secondly, long-term investors profit from the overall decline in prices which accompanies the bear market. The average investors should look for large and solid corporations which are expected to grow during the next twenty years. Even if their stock prices fell considerably, these companies are more than likely to survive the drop in values. Therefore, it is important to differentiate between the current value of the stock and the business itself.
Bid and Ask Prices
The stock exchanges determine the value of the stock prices. Here, the bid and ask prices meet while the exchange functions as their intermediary. Hereinafter, we shall try to give and explanation of the bid and ask prices.
The bid price stands for the price at which the buyer agrees to purchase certain a certain amount of stock. Therefore, the bid price is stipulated by the buyer.
On the other hand, the ask price represents the price at which the seller will go ahead with the sale of the same stock. The ask price is, therefore, determined by the seller.
The exchange functions mainly to coordinate these prices with regard to both, the buyers and sellers of stock. Naturally, this service cannot be free of charge.
There is a difference between the bid and the ask prices. In reality, the price, determined by the sellers, always exceeds the bid price. The investors will need to pay the stipulated ask price if they have decided to invest in stock at a given higher price. Yet, if persons intend to sell their stock, they will get the bid price. The latter will represent a lower sum than the ask price.
The spread refers to difference between the ask price and the bid prices. The spread is directly transferred to the hands of the brokers or experts who manage these stock transactions. On the other hand, the spread also serves for the payment of other relevant fees, not just for the commissions paid to the brokers.
If individuals do not make use of specific market orders, the setting of prices for both, the buyers and sellers, becomes impossible. This is highly relevant with regard to stocks that are actively traded. Their character is typically quite dynamic.
The bid and the ask spread consume a part of the profit. However, it is not advised to avoid them as they have been established as an effective system over time.
Block
Block is a term referring to a large quantity (usually 10,000+) of shares in a company. For example “He holds a large block of Microsoft’s stock”.
Blue Chip
This article offers an explanation of the term Blue Chip Stock. The phrase was invented by Oliver Gingold of Dow Jones in 1923 or 1924. The blue chip term, for example, comes from poker where the highest and most valuable playing chip is the blue one. This definition is used for stocks of recognized and financially sound firms with high brand name recognition. They have stable earnings and no extensive liabilities. This type of companies has demonstrated its capacity to pay dividends in times of growth and decline. They also have various product lines and a strong customer base. These stocks usually carry less risk than other types of stocks.
Blue chip stock demonstrates a combination of high credit rating and stable earnings power. It is qualified as a less unstable investment in comparison to the ownership of shares in firms without this kind of status. In general, blue chip has been institutionalized as a status. Investors usually purchase blue chip companies with the aim of securing sustainable growth of their portfolios.
The blue chip’s stock price typically reflects the S&P 500. It typically offers a diverse basis for revenue creation. ?he majority of the firms included in the Dow Jones Industrial Average may be referred to as blue chip stock companies. It should be noted that blue chip stock is not confined to the Dow stock. The blue chip covers all publicly traded stock of major international firms that are listed on the foreign stock market. It is often found in conservative investors and retirement portfolios. The "Dow" covers the 30 largest publicly held companies in the USA. Among the included firms are Coca Cola, American Express, IBM, General Electric, and Walt Disney. If you purchase shares of these companies, you can be absolutely sure that you’ll receive a return on your investments.
Bond
The bonds are a form of debt security in which the issuer owes a debt to the bondholders. The issuing institution will repay the principal at a fixed date, named maturity date. Depending on the term of the bond, we can differentiate between three categories of bond maturities. Bills will have maturities up to one calendar year. Notes will have maturities in the range of one to ten years. The maturity of bonds will exceed ten years.
The issuing body can be a company, credit institution, government authority, or supranational structure. Furthermore, the issuer is bound to pay interest to the holders of bonds. In principle, they turn into creditors while the issuer becomes the debtor. The holder uses the bonds as a form of instrument for external financing.
Similarly to stock, the bonds represent securities. The difference between both tools is that the bondholders are creditors whereas the stockholders have an owner`s equity in the enterprise. In terms of bonds categorization, there is a great variety of bonds. Fixed rate bonds have a coupon or interest rate that remains unchanged during the life of the bond. The coupon of the floating rate notes is recalculated according to determined interest rate index. The inflation linked bonds tie the principal and the interest payments to inflation. Some bonds, such as the perpetual bonds, have no maturity date.
Similarly, ultra long-term bonds may reach maturity in a couple of centuries. The West Shore Railroad has issued bonds that will mature in 2361. Another type is the municipal bond. This debt security can be issued by government structures, cities, local authorities and their agencies. The municipal bonds are typically exempt from income tax. The revenue bond is a special sub-category of the municipal bonds. The repayment guarantees are based on a certain revenue generating structure which matches the purpose of the revenue bonds. The lottery bonds are usually issued by European states. The issuing body redeems randomly picked bonds within the issue. The principal and the interest payments of the asset backed securities are guaranteed by cash flow from other assets. Finally, the war bonds are issued by states for the purpose of funding military operations.
Book Value
The Book Value or the net asset value, as termed in the United Kingdom, has different applications. Firstly, it determines the floor for the stock prices in the event of the worst-case scenario. Secondly, the term book value refers to the per share value. This means that in the balance sheet, the equity is divided by the number of shares. Thirdly, the book value indicates the value of a certain asset according to the statement of financial position. The calculation of the book value deduces any depreciation's, amortizations, and impairment costs from the original cost of the assets. In other words, the book value refers to the total assets less the intangible assets and liabilities. Goodwill and intangible assets are sometimes included in the calculation of the book value. The term tangible book value indicates that goodwill and other non-cash assets are excluded.
The acquisition cost of an asset represents its initial book value. In has to be mentioned that some items are not booked as assets. For instance, irregular and occasional supplies will be recorded as expenses. After the initial recording, depression, amortization, and depletion are employed to reduce the assets` book value. Depreciation indicates the reduction in value for tangible assets such as buildings and equipment. Note that land is not subject to depreciation. Amortization reflects the decline in value for intangible assets (for instance, patents and trademarks). Finally, depletion records the level of consumption of natural resources. The calculation of the trial balance precedes the recording of non-cash expenses. This procedure ensures that the cash operations are recorded precisely. Valuation changes of assets and liabilities are recorded in the form of contra accounts. The term accumulated depreciation refers to contra asset account that is employed to record depreciation. Then, the valuation of an asset represents the costs less the accumulated depreciation.
Several factors may account for changes in the book value. The sale of shares or units will increase the total book value. The issuance of additional shares at a higher price has a similar effect. On the opposite, the book value decreases when dividends are paid out. Comprehensive losses also decrease the book value.
BOP - [Balance of Payments]
A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.
BOT - [Balance of Trade]
The difference between a country's imports and its exports. Balance of trade is the largest component of a country's balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus.
Also referred to as "trade balance" or "international trade balance"
Broker
A Broker is an agent who facilitates securities trading. Brokers receive compensation for the services they provide in form of commission.
Bull
The Bull term refers to investor who believes that certain market is rising or will rise. For example some investors are bullish on silver, and other are dollar bulls.
Bull Market
The term bull market refers to a financial market with upward movement of prices. Alternatively, the definition covers markets at which the prices are expected to grow. The term is most widely used with regard to the stock market. However, it can cover any tradable item such as bonds and commodities, among others. A major characteristic of the bull markets is optimism. Investors believe that the markets will continue to perform in a similar fashion. However, it is difficult to predict whether the prices at the bull market will grow consistently. Speculative trading and some psychological effects such as cognitive or emotional bias can exert a negative impact on the growing market. In general, expectations will play an important role with regard to the financial markets. The perception of some economic developments as positive or negative may cause fluctuations.
Bull markets usually appear when the economy recovers and starts to perform better. Investors start buying with the expectation of capital gains. One of the most widely known examples of a bull market was the New York Stock Exchange up to the Great Crash of 1929. The investors believed that the market was capable of sustaining the high prices. However, the Black Thursday witnessed the collapse of share prices.
Investors are typically acting in a group fashion and without a predetermined direction. This form of behavior is denoted by the term “herd behavior”. The expression “bull market”, on the other hand, refers to the way in which animals attack their rivals. A bull that thrusts his horn up metaphorically describes the upward movement of prices. In general, it is believed that the markets go through regular market cycles. The opposite of the bull market, the bear market, refers to a considerable drop in market prices over a longer time period. Bear markets are also accompanied with high expectations on the part of the investors. They appear when the state of the economy starts to decline.
Arab political party advocating the formation of a single Arab socialist nation. It has branches in many Middle Eastern countries and has been the ruling party in Syria and Iraq.
Bad Credit Loans
Having bad credit used to mean it was very difficult to be approved for a loan. However, within the last decade, there has been an increase in availability of sub-prime borrowing opportunities for many types of loans. These can include mortgages, auto, secured and personal loans. Approximately 33% of private loans are bad credit loans.
Loans for bad credit are called Sub-prime loans. The difference between Sub-Prime and Prime loans is the interest rates which are offered. People with bad credit are a higher risk for a default such as late payments or missing payments. Lenders must protect themselves from loss with borrowers who may be high risk. There are usually fees associated with bad credit loans such as obtaining the loan, higher down payment, and sometimes early payment penalties.
If a bad credit loan is utilized properly, it can be a valuable tool for repairing credit and improving finances. However, a rise in fraudulent and predatory loans taking advantage of people desperate has risen in the last few years, which can further damage people's bad credit and finances. When pursuing a loan, it is always best to take time to do plenty of research, and be sure to deal with a reputable lender.
It is possible to get a mortgage with bad credit, but usually people end up borrowing more than they can reasonably afford, which leads to foreclosure. A better course is to get a smaller house with a more inexpensive loan and work toward better credit so that a bigger loan can be sought in the future for the dream home of choice.
An auto loan with bad credit will usually have a high interest rate, which may not make it worthwhile. They may also require some sort of collateral, sometimes the car itself. Instead, it might be better to drive the current car for a while longer, or buying a used car for less money.
Debt consolidation is an option to personal bills. This can combine credit cards, bank loans, medical bills, or other types of smaller expenses. The interest rates may be high, though a single payment can make finances more manageable while repairing credit.
Cash advances, or Payday loans have less to do with credit rating, and is rather based on income. Generally these loans are for smaller amounts of money up to about $2,000. These should be avoided, and used only in extreme emergencies, as they have the highest interest rates; well over 100%!
As previously stated, a bad credit loan can be a benefit if used properly. All documentation should be read, including the "fine print". Never jump into anything, and always ask questions if something is not fully understood. Be realistic about the amount being borrowed and take into consideration the full amount of the loan, including monthly payments, interest rates, and any associated fees. Staying committed, and making payments on time and in the full amount will repair credit.
Balance Sheet
The Balance Sheet or the statement of financial position reveals the individual's or company`s assets, liabilities, and owner's equity. The balance sheet equates the assets to the sum of the liabilities and the owner's equity. In other words, the assets are balanced with the financial obligations and the equities. The assets are divided into current and fixed or long-term assets. The category of current assets contains accounts receivable, cash and cash equivalents, inventory, prepaid expenses, and short-term investments. The fixed assets refer to real estate, machinery, tools, and buildings. Other long-term assets include intangible assets, investment in real estate, biological investment (asset in living stock), financial assets, and investment via the equity method.
Liabilities refer to the financial obligations of the entity to outside parties. They may give rise to the transfer of assets or to the provision of different services. Liabilities are also divided into current and long-term liabilities. The category of current liabilities comprises of financial obligations that are payable within one year. These are short term borrowings, wages, taxes, and others. The long-term liabilities include obligations that are due at least one year after the balance sheet has been prepared. They include long-term bond repayments, long-term leases and product warranties, pension obligations, etc.
The owner`s equity represents the initial capital that is invested in the entity. Then, the equity also refers to the funds that are owed to the company owners after the payment of liabilities. In other words, it is the owner`s interest in the business entity. The entity comprises of tangible and intangible assets. It includes assets such as preferred and treasury stock, capital surplus, retained earnings, and others. The term shareholder`s equity is used if the owners are shareholders. The investors will be interested in both, changes in the equity and increases or decreases in the value of their individual shares. Finally, the market value of the shares does not match the owner`s equity per share. The market value is determined by factors such as cash flows, profits, and other components of the accounting statements.
Barrels Per Day
Production of crude oil and petroleum products is frequently measured in barrels per day, often abbreviated bpd or bd. A barrel is a volume measure of forty-two United States gallons. Conversion of barrels to metric tons depends on the density of a specific product. About 7.3 barrels of average crude oil, or about 7 barrels of heavy crude oil, weigh 1 metric ton. Light products, such as gasoline and kerosene, average close to eight barrels per metric ton.
Basic Point
Basic Point is 1/100 of 1%. For example if a news says that the central bank increased the interest rate with 25 basic points from 5%, this means that the new interest rate is 5.25%.
Bear
The Bear term refers to investor who believes that certain market is in decline or will decline. For example some financial analysts are bearish on gold and precious metals, other are dollar bears.
Bear Market
Bear markets refer to market developments that denote a continuous decline in the price of securities. The investors expect losses and the pessimistic attitudes thrive. In should be noted that Bear markets differ from corrections which last no longer than two months. In contrast to corrections, the bear markets do not usually offer good entry points. Moreover, it is difficult to predict when the bottom will be reached.
The bear market appears when the state of the economy starts to decline. There is a considerable drop in most of the stock prices. This substantial decline is typically due to decreases in the profits of corporations. Alternatively, the bear market starts after corrections of over-evaluation. This happens when the value of stocks had been too high and now decreases to more acceptable levels. Scared investors will sell their securities and cause a further drop in the price level. This herd behavior becomes worrisome for other investors who also decide to sell their stock. The whole process turns into a vicious cycle.
In general, the value of the securities may drop suddenly or over an extended period of time. The final result will be the same: the quoted value of securities declines. Two major conclusions may be drawn with regard to bear markets. Firstly, the bear market affects adversely only those investors who plan to sell their stock at the very moment. Secondly, long-term investors profit from the overall decline in prices which accompanies the bear market. The average investors should look for large and solid corporations which are expected to grow during the next twenty years. Even if their stock prices fell considerably, these companies are more than likely to survive the drop in values. Therefore, it is important to differentiate between the current value of the stock and the business itself.
Bid and Ask Prices
The stock exchanges determine the value of the stock prices. Here, the bid and ask prices meet while the exchange functions as their intermediary. Hereinafter, we shall try to give and explanation of the bid and ask prices.
The bid price stands for the price at which the buyer agrees to purchase certain a certain amount of stock. Therefore, the bid price is stipulated by the buyer.
On the other hand, the ask price represents the price at which the seller will go ahead with the sale of the same stock. The ask price is, therefore, determined by the seller.
The exchange functions mainly to coordinate these prices with regard to both, the buyers and sellers of stock. Naturally, this service cannot be free of charge.
There is a difference between the bid and the ask prices. In reality, the price, determined by the sellers, always exceeds the bid price. The investors will need to pay the stipulated ask price if they have decided to invest in stock at a given higher price. Yet, if persons intend to sell their stock, they will get the bid price. The latter will represent a lower sum than the ask price.
The spread refers to difference between the ask price and the bid prices. The spread is directly transferred to the hands of the brokers or experts who manage these stock transactions. On the other hand, the spread also serves for the payment of other relevant fees, not just for the commissions paid to the brokers.
If individuals do not make use of specific market orders, the setting of prices for both, the buyers and sellers, becomes impossible. This is highly relevant with regard to stocks that are actively traded. Their character is typically quite dynamic.
The bid and the ask spread consume a part of the profit. However, it is not advised to avoid them as they have been established as an effective system over time.
Block
Block is a term referring to a large quantity (usually 10,000+) of shares in a company. For example “He holds a large block of Microsoft’s stock”.
Blue Chip
This article offers an explanation of the term Blue Chip Stock. The phrase was invented by Oliver Gingold of Dow Jones in 1923 or 1924. The blue chip term, for example, comes from poker where the highest and most valuable playing chip is the blue one. This definition is used for stocks of recognized and financially sound firms with high brand name recognition. They have stable earnings and no extensive liabilities. This type of companies has demonstrated its capacity to pay dividends in times of growth and decline. They also have various product lines and a strong customer base. These stocks usually carry less risk than other types of stocks.
Blue chip stock demonstrates a combination of high credit rating and stable earnings power. It is qualified as a less unstable investment in comparison to the ownership of shares in firms without this kind of status. In general, blue chip has been institutionalized as a status. Investors usually purchase blue chip companies with the aim of securing sustainable growth of their portfolios.
The blue chip’s stock price typically reflects the S&P 500. It typically offers a diverse basis for revenue creation. ?he majority of the firms included in the Dow Jones Industrial Average may be referred to as blue chip stock companies. It should be noted that blue chip stock is not confined to the Dow stock. The blue chip covers all publicly traded stock of major international firms that are listed on the foreign stock market. It is often found in conservative investors and retirement portfolios. The "Dow" covers the 30 largest publicly held companies in the USA. Among the included firms are Coca Cola, American Express, IBM, General Electric, and Walt Disney. If you purchase shares of these companies, you can be absolutely sure that you’ll receive a return on your investments.
Bond
The bonds are a form of debt security in which the issuer owes a debt to the bondholders. The issuing institution will repay the principal at a fixed date, named maturity date. Depending on the term of the bond, we can differentiate between three categories of bond maturities. Bills will have maturities up to one calendar year. Notes will have maturities in the range of one to ten years. The maturity of bonds will exceed ten years.
The issuing body can be a company, credit institution, government authority, or supranational structure. Furthermore, the issuer is bound to pay interest to the holders of bonds. In principle, they turn into creditors while the issuer becomes the debtor. The holder uses the bonds as a form of instrument for external financing.
Similarly to stock, the bonds represent securities. The difference between both tools is that the bondholders are creditors whereas the stockholders have an owner`s equity in the enterprise. In terms of bonds categorization, there is a great variety of bonds. Fixed rate bonds have a coupon or interest rate that remains unchanged during the life of the bond. The coupon of the floating rate notes is recalculated according to determined interest rate index. The inflation linked bonds tie the principal and the interest payments to inflation. Some bonds, such as the perpetual bonds, have no maturity date.
Similarly, ultra long-term bonds may reach maturity in a couple of centuries. The West Shore Railroad has issued bonds that will mature in 2361. Another type is the municipal bond. This debt security can be issued by government structures, cities, local authorities and their agencies. The municipal bonds are typically exempt from income tax. The revenue bond is a special sub-category of the municipal bonds. The repayment guarantees are based on a certain revenue generating structure which matches the purpose of the revenue bonds. The lottery bonds are usually issued by European states. The issuing body redeems randomly picked bonds within the issue. The principal and the interest payments of the asset backed securities are guaranteed by cash flow from other assets. Finally, the war bonds are issued by states for the purpose of funding military operations.
Book Value
The Book Value or the net asset value, as termed in the United Kingdom, has different applications. Firstly, it determines the floor for the stock prices in the event of the worst-case scenario. Secondly, the term book value refers to the per share value. This means that in the balance sheet, the equity is divided by the number of shares. Thirdly, the book value indicates the value of a certain asset according to the statement of financial position. The calculation of the book value deduces any depreciation's, amortizations, and impairment costs from the original cost of the assets. In other words, the book value refers to the total assets less the intangible assets and liabilities. Goodwill and intangible assets are sometimes included in the calculation of the book value. The term tangible book value indicates that goodwill and other non-cash assets are excluded.
The acquisition cost of an asset represents its initial book value. In has to be mentioned that some items are not booked as assets. For instance, irregular and occasional supplies will be recorded as expenses. After the initial recording, depression, amortization, and depletion are employed to reduce the assets` book value. Depreciation indicates the reduction in value for tangible assets such as buildings and equipment. Note that land is not subject to depreciation. Amortization reflects the decline in value for intangible assets (for instance, patents and trademarks). Finally, depletion records the level of consumption of natural resources. The calculation of the trial balance precedes the recording of non-cash expenses. This procedure ensures that the cash operations are recorded precisely. Valuation changes of assets and liabilities are recorded in the form of contra accounts. The term accumulated depreciation refers to contra asset account that is employed to record depreciation. Then, the valuation of an asset represents the costs less the accumulated depreciation.
Several factors may account for changes in the book value. The sale of shares or units will increase the total book value. The issuance of additional shares at a higher price has a similar effect. On the opposite, the book value decreases when dividends are paid out. Comprehensive losses also decrease the book value.
BOP - [Balance of Payments]
A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.
BOT - [Balance of Trade]
The difference between a country's imports and its exports. Balance of trade is the largest component of a country's balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus.
Also referred to as "trade balance" or "international trade balance"
Broker
A Broker is an agent who facilitates securities trading. Brokers receive compensation for the services they provide in form of commission.
Bull
The Bull term refers to investor who believes that certain market is rising or will rise. For example some investors are bullish on silver, and other are dollar bulls.
Bull Market
The term bull market refers to a financial market with upward movement of prices. Alternatively, the definition covers markets at which the prices are expected to grow. The term is most widely used with regard to the stock market. However, it can cover any tradable item such as bonds and commodities, among others. A major characteristic of the bull markets is optimism. Investors believe that the markets will continue to perform in a similar fashion. However, it is difficult to predict whether the prices at the bull market will grow consistently. Speculative trading and some psychological effects such as cognitive or emotional bias can exert a negative impact on the growing market. In general, expectations will play an important role with regard to the financial markets. The perception of some economic developments as positive or negative may cause fluctuations.
Bull markets usually appear when the economy recovers and starts to perform better. Investors start buying with the expectation of capital gains. One of the most widely known examples of a bull market was the New York Stock Exchange up to the Great Crash of 1929. The investors believed that the market was capable of sustaining the high prices. However, the Black Thursday witnessed the collapse of share prices.
Investors are typically acting in a group fashion and without a predetermined direction. This form of behavior is denoted by the term “herd behavior”. The expression “bull market”, on the other hand, refers to the way in which animals attack their rivals. A bull that thrusts his horn up metaphorically describes the upward movement of prices. In general, it is believed that the markets go through regular market cycles. The opposite of the bull market, the bear market, refers to a considerable drop in market prices over a longer time period. Bear markets are also accompanied with high expectations on the part of the investors. They appear when the state of the economy starts to decline.