Levant
Historically, the countries along the eastern shores of the Mediterranean.
Leverage
The term leverage covers the use of debt for the purpose of partial investment financing. The goal is to boost the potential returns on the investment in question. The term is also used to indicate the degree to which businesses use borrowed capital to finance their projects. Highly leveraged companies are exposed to increased risks of bankruptcy in case that they are unable to repay their outstanding debts. In addition, it may be difficult to find new lenders for future projects.
Financial leverage refers to borrowed funding which is subsequently reinvested, bringing higher returns than the cost of the interest on the loan. In general, the debt to equity ratio of the company indicates its leverage. It is calculated by dividing the total liabilities by the shareholders` equity. Only long term debt is included in the calculation of the company’s financial leverage.
Leverage also refers to margin accounts in which the brokers lend cash for the purchase of securities. The loan is secured by collateral in the form of securities or cash. In case that the value of the shares drops significantly, the margin account holder is obliged to deposit additional money. Alternatively, he has to sell a certain portion of his shares.
Further along, real estate leverage is an effective method to increase the returns on investments. In essence, this type of leverage refers to the use of borrowed money for the purchase of real estate property. It is a known fact that most of the time, real estate properties increase their value with the passage of time. Moreover, real estate is a long term stable investment. Leverage works best for the properties which appreciate at the current moment. Good neighborhood, property history, as well as home improvements add to the value of the property. For instance, renovation and refurbishment of the rooms or the conversion to wooden floor provide some of the best rates of returns in home improvement.
http://www.investopedia.com/terms/l/leverage.asp
Liabilities
Liabilities refer to legally binding obligations of companies and individuals to repay their debts. These obligations result from past transactions and may lead to change of possession or the provision of certain services. The transfer of assets or the procurement of services should occur within a specified time period or on demand.
Companies` liabilities represent a form of assets that can be used to finance future growth. In accounting, the liabilities of companies are reported on the balance sheet. They are typically assigned to two categories: current and long-term liabilities. The first category refers to all outstanding debt to creditors and suppliers that is due within a period of one year. The companies may repay it by converting some assets into cash. There are several major types of current liabilities. Accounts payable refer to the money that a person or a legal entity owes to employees, suppliers, or partners. Accrued expenses represent unpaid bills, typically marketing and distribution costs, which have not come due. Income taxes are one type of accrued expenses. Taxes are enforced contributions paid in the form of money or labor. A portion of the long-term debt may also come due in a certain quarter of the fiscal year. For this reason, it will be referred to as a current liability. Wages or compensations for work are also covered by this category.
The long-term liabilities of a company represent a category of debt that needs to be paid in a period that exceeds twelve months. Notes payable stand for debt that is issued to a single borrower. On the other hand, bonds payable are issued to a group of borrowers or to the general public. The capital lease obligations require the payment of rent for the use of property and plant facilities. The post-retirement benefit obligations refer to benefits that are paid under the terms of pension plans. Finally, other accrued expenses stand for deferred income tax or other obligations such as lawsuits that await settlement.
Limit Order
A Limit Order is an order to buy shares in a company which has a limit price. For example if you want to buy shares of company ABC you can specify a maximum price you are willing to pay per share and this will be your limit order, The same is valid if you want to sell shares of a company – you can specify a minimum price per share that you would accept and this again will be your limit order.
Liquidation
Liquidation is the act of converting an asset (securities, real estate) into cash.
Liquidity
The Liquidity term refers to the easy with which an asset can be converted into cash. The liquidity of a certain company’s stock is a measure of the ability of the market to absorb buying and selling of this stock without serious effect on the stock price. When we say that a stock is liquid, this means that a relatively large blocks of this stock can be bought or sold in short period of time, without substantially affecting the price of the stock. Examples of liquid stocks are blue-chip stocks like Microsoft or GE.
Illiquid stock is a stock with low volume, which price can be affected by relatively small trades. A classic example of illiquid asset is real estate.
Listed Stock
A Listed Stock is a stock of a corporation traded on stock exchange.
Loan
The term loan refers to a category of debt in which the lending institution gives funding or property to the borrower. In return, the debtor is obliged to return this property or to repay the outstanding obligations, including the interest on the loan. Typically, there is a specified time period for the loan repayment and the borrower repays his dues in regular installments. On the other hand, the lender bears risk that the borrower may default on his obligations.
In practice, any material item may be lent and borrowed. Secured loans refer to loans that have been guaranteed by collateral such as real estate property or vehicle. Mortgage loans represent a type of loan that are secured by real property such as land and land improvements. In basic terms, persons will borrow money against the predetermined market value of the property which they wish to purchase. In addition, they agree to repay the loan and the corresponding interest to the lender. Car loans are granted to finance the purchase of a new or an old vehicle. In this case, the vehicle itself serves to secure the loan. The loan period encompasses only the useful life of the car. Two types of car loans exist: direct and indirect. Under the terms of direct car loan agreements, the lending institution grants the loan directly to the consumer. The indirect car loans are offered by car dealerships which act in the role of intermediaries between the lending institution and the borrower.
On the opposite, unsecured loans are entirely based on the credit rating of the borrower. This type of loans is cheaper for the borrower but it carries higher risk for the lender. Personal unsecured loans are granted to individuals who carry the sole responsibility for their repayment. Business unsecured loans are granted to legal entities. The business unsecured loan with a personal guarantee is given to businesses. However, if a company defaults on its loan, the individual who acts as a guarantee becomes the payer of last resort. A small portion of the business loans is granted in the form of unsecured credit. Most business loans are secured by the assets of the company, any personal assets, or both. It is important to note that the banking institutions offer loans to businesses which have proven operating histories.
Further along, credit lines refer to specific type of arrangements in which the lending institution grants a certain amount of unsecured credit for an agreed period of time. Credit lines come in various forms such as cash, demand loan, overdraft, and term loan, bad credit loan, among others. In essence, they represent accounts whereby interest is repaid only on the withdrawn amounts of cash. Credit lines are usually extended to valuable customers who seek to overcome liquidity issues. Finally, credit cards allow the purchase of goods and services in return to the holder’s promise to pay them off. Credit cards are typically issued by banking institutions and credit unions. The card holder is obliged to pay a specified minimum amount of the bill at a fixed date or he will be charged a higher amount. Moreover, he is required to pay interest in case that the balance is not paid in its entirety.
Loan Principal
When we discuss loans, the borrowed amount is the loan principal. The principle is used as a basis to calculate the interest. The latter is separated from the principle in an amortization schedule. Thus it becomes evident which of the client’s monthly payments is due for the repayment of interest and which goes for the principal. The payment of the due interest does not reduce the principal.
A loan is a service and as such, it has a value. In view of its nature, the loan is granted in return for a reward. For the long term capital investments , the borrowed money is repaid with monthly, semi-annually, or annually. The calculation of these payments is performed in several ways:
- Equal payments per time period – amortization;
- Equal payments of the principal over a period of time;
- Equal payments spread over a particular time period with a quoted
payment at the end which is due to close the balance. The last is also
known as the balloon payment.
When the first method is used, the accrued interest is included in each payment, calculated only on the unpaid balance. Then, a part of the principle is added. With each payment, the amount of the principle which is applied to the payment increases.
The method which uses the equal payments principle also includes the unpaid balance of the accrued interest, plus an equal part of the principle. The payment due diminishes as the remaining balance of the principle also declines. The amount of the interest which is due also decreases because it is calculated over the principal.
The two plans discussed above are the most common methods applied for the computation of loan payment on long-term investments. In addition, it is possible for the lenders to use the balloon system in order to decrease the size of the periodic payments.
Long
The Long term refers to owning stocks in corporation or commodities, with expectations of price appreciation. For example when we say that “Somebody is long on gold” this means that this individual has invested in gold and expects rise in the price of gold for extended period of time.
Long Position
The term position covers any commitment to purchase or sell securities and commodities as well as their actual ownership by individuals and legal entities. Long position or long refers to the purchase of a security or a commodity with the idea of earning profits from a future increase in value. In view of foreign exchange, the primary currency is considered long while the secondary is viewed as short. It is important to focus on the value of the particular option, not the instrument itself.
Typically, a long position is established by means of buy order. The investor will profit only in case that the security increases in price. Long may also refer to a long position in futures contracts. The latter represents agreements between the entity which commits to deliver a certain commodity or security (short position) and the party that agrees to accept them (long position). Each futures contract will have specific provisions related to quality and quantity, established price per unit, deadline, and options for delivery. Again, the holder of this position will earn a profit only in case that the value of the futures contract increases. Another alternative is to offset the position by means of counter-contract. Investors who hold long positions are also referred to as bull speculators. The latter covers dealers and speculators who purchase investment portfolios with the intent of selling the securities and commodities at a higher price in the future.
In contrast, short selling refers to the sale of assets, typically securities, which have been borrowed by another entity. The aim is to earn a profit when the value of the asset decreases. The short seller pays smaller amount for repurchasing the assets than he has received for their sale. Naturally, he will loose money if the assets increase in value. Fees related to the assets' borrowing as well as payments for dividends represent additional costs.
Long-Term Debt
Long-term debt refers to liabilities that last longer than a period of one year. They are also referred to as funded debt. The firms are obliged to disclose their long-term obligations on the balance sheet, including the corresponding interest rates and the date of maturity. The long- term debt differs from the company’s long term liabilities. The latter cover the supply of various services that may be paid already. The amount of long-term financial obligations on the balance sheet is essential. Decreasing debt over one or more years is a good sign of the company’s financial health. Firms with extensive amounts of debt may be overwhelmed by interest rates. Moreover, they will have insufficient amount of working capital for their daily operations. These factors may ultimately result in bankruptcy.
The debt typically consists of business loans, mortgages, notes and bonds with maturities over one year, and others. Debentures represent a form of bonds that are not secured by the company’s assets. However, they are accepted by the investors if the firm has a good credit standing or guarantees considerable earnings' rate. Mortgage bonds, on the other hand, are secured by some form of lien such as plant buildings and equipment. Securities such as T-bills are short-term debt because their maturities are shorter than the stated period.
Most lending institutions prefer log-term loans and unsecured loans due to the comparative predictability of their repayment rates. The majority of the lending institutions will conclude long-term debt agreements if the company’s assets and leverage are adequate. Long-term loan lenders include: the banks, trust and insurance companies, multiple loan specialists, as well as the pension funds. Typically, long periods of stable sales and profits facilitate the use of long-term financial obligations. Other factors in favor of long-term debt include: large profit margins, potential increase in profits, low price-earnings ratio with regard to the interest rates, and expected increase in the price levels.
Historically, the countries along the eastern shores of the Mediterranean.
Leverage
The term leverage covers the use of debt for the purpose of partial investment financing. The goal is to boost the potential returns on the investment in question. The term is also used to indicate the degree to which businesses use borrowed capital to finance their projects. Highly leveraged companies are exposed to increased risks of bankruptcy in case that they are unable to repay their outstanding debts. In addition, it may be difficult to find new lenders for future projects.
Financial leverage refers to borrowed funding which is subsequently reinvested, bringing higher returns than the cost of the interest on the loan. In general, the debt to equity ratio of the company indicates its leverage. It is calculated by dividing the total liabilities by the shareholders` equity. Only long term debt is included in the calculation of the company’s financial leverage.
Leverage also refers to margin accounts in which the brokers lend cash for the purchase of securities. The loan is secured by collateral in the form of securities or cash. In case that the value of the shares drops significantly, the margin account holder is obliged to deposit additional money. Alternatively, he has to sell a certain portion of his shares.
Further along, real estate leverage is an effective method to increase the returns on investments. In essence, this type of leverage refers to the use of borrowed money for the purchase of real estate property. It is a known fact that most of the time, real estate properties increase their value with the passage of time. Moreover, real estate is a long term stable investment. Leverage works best for the properties which appreciate at the current moment. Good neighborhood, property history, as well as home improvements add to the value of the property. For instance, renovation and refurbishment of the rooms or the conversion to wooden floor provide some of the best rates of returns in home improvement.
http://www.investopedia.com/terms/l/leverage.asp
Liabilities
Liabilities refer to legally binding obligations of companies and individuals to repay their debts. These obligations result from past transactions and may lead to change of possession or the provision of certain services. The transfer of assets or the procurement of services should occur within a specified time period or on demand.
Companies` liabilities represent a form of assets that can be used to finance future growth. In accounting, the liabilities of companies are reported on the balance sheet. They are typically assigned to two categories: current and long-term liabilities. The first category refers to all outstanding debt to creditors and suppliers that is due within a period of one year. The companies may repay it by converting some assets into cash. There are several major types of current liabilities. Accounts payable refer to the money that a person or a legal entity owes to employees, suppliers, or partners. Accrued expenses represent unpaid bills, typically marketing and distribution costs, which have not come due. Income taxes are one type of accrued expenses. Taxes are enforced contributions paid in the form of money or labor. A portion of the long-term debt may also come due in a certain quarter of the fiscal year. For this reason, it will be referred to as a current liability. Wages or compensations for work are also covered by this category.
The long-term liabilities of a company represent a category of debt that needs to be paid in a period that exceeds twelve months. Notes payable stand for debt that is issued to a single borrower. On the other hand, bonds payable are issued to a group of borrowers or to the general public. The capital lease obligations require the payment of rent for the use of property and plant facilities. The post-retirement benefit obligations refer to benefits that are paid under the terms of pension plans. Finally, other accrued expenses stand for deferred income tax or other obligations such as lawsuits that await settlement.
Limit Order
A Limit Order is an order to buy shares in a company which has a limit price. For example if you want to buy shares of company ABC you can specify a maximum price you are willing to pay per share and this will be your limit order, The same is valid if you want to sell shares of a company – you can specify a minimum price per share that you would accept and this again will be your limit order.
Liquidation
Liquidation is the act of converting an asset (securities, real estate) into cash.
Liquidity
The Liquidity term refers to the easy with which an asset can be converted into cash. The liquidity of a certain company’s stock is a measure of the ability of the market to absorb buying and selling of this stock without serious effect on the stock price. When we say that a stock is liquid, this means that a relatively large blocks of this stock can be bought or sold in short period of time, without substantially affecting the price of the stock. Examples of liquid stocks are blue-chip stocks like Microsoft or GE.
Illiquid stock is a stock with low volume, which price can be affected by relatively small trades. A classic example of illiquid asset is real estate.
Listed Stock
A Listed Stock is a stock of a corporation traded on stock exchange.
Loan
The term loan refers to a category of debt in which the lending institution gives funding or property to the borrower. In return, the debtor is obliged to return this property or to repay the outstanding obligations, including the interest on the loan. Typically, there is a specified time period for the loan repayment and the borrower repays his dues in regular installments. On the other hand, the lender bears risk that the borrower may default on his obligations.
In practice, any material item may be lent and borrowed. Secured loans refer to loans that have been guaranteed by collateral such as real estate property or vehicle. Mortgage loans represent a type of loan that are secured by real property such as land and land improvements. In basic terms, persons will borrow money against the predetermined market value of the property which they wish to purchase. In addition, they agree to repay the loan and the corresponding interest to the lender. Car loans are granted to finance the purchase of a new or an old vehicle. In this case, the vehicle itself serves to secure the loan. The loan period encompasses only the useful life of the car. Two types of car loans exist: direct and indirect. Under the terms of direct car loan agreements, the lending institution grants the loan directly to the consumer. The indirect car loans are offered by car dealerships which act in the role of intermediaries between the lending institution and the borrower.
On the opposite, unsecured loans are entirely based on the credit rating of the borrower. This type of loans is cheaper for the borrower but it carries higher risk for the lender. Personal unsecured loans are granted to individuals who carry the sole responsibility for their repayment. Business unsecured loans are granted to legal entities. The business unsecured loan with a personal guarantee is given to businesses. However, if a company defaults on its loan, the individual who acts as a guarantee becomes the payer of last resort. A small portion of the business loans is granted in the form of unsecured credit. Most business loans are secured by the assets of the company, any personal assets, or both. It is important to note that the banking institutions offer loans to businesses which have proven operating histories.
Further along, credit lines refer to specific type of arrangements in which the lending institution grants a certain amount of unsecured credit for an agreed period of time. Credit lines come in various forms such as cash, demand loan, overdraft, and term loan, bad credit loan, among others. In essence, they represent accounts whereby interest is repaid only on the withdrawn amounts of cash. Credit lines are usually extended to valuable customers who seek to overcome liquidity issues. Finally, credit cards allow the purchase of goods and services in return to the holder’s promise to pay them off. Credit cards are typically issued by banking institutions and credit unions. The card holder is obliged to pay a specified minimum amount of the bill at a fixed date or he will be charged a higher amount. Moreover, he is required to pay interest in case that the balance is not paid in its entirety.
Loan Principal
When we discuss loans, the borrowed amount is the loan principal. The principle is used as a basis to calculate the interest. The latter is separated from the principle in an amortization schedule. Thus it becomes evident which of the client’s monthly payments is due for the repayment of interest and which goes for the principal. The payment of the due interest does not reduce the principal.
A loan is a service and as such, it has a value. In view of its nature, the loan is granted in return for a reward. For the long term capital investments , the borrowed money is repaid with monthly, semi-annually, or annually. The calculation of these payments is performed in several ways:
- Equal payments per time period – amortization;
- Equal payments of the principal over a period of time;
- Equal payments spread over a particular time period with a quoted
payment at the end which is due to close the balance. The last is also
known as the balloon payment.
When the first method is used, the accrued interest is included in each payment, calculated only on the unpaid balance. Then, a part of the principle is added. With each payment, the amount of the principle which is applied to the payment increases.
The method which uses the equal payments principle also includes the unpaid balance of the accrued interest, plus an equal part of the principle. The payment due diminishes as the remaining balance of the principle also declines. The amount of the interest which is due also decreases because it is calculated over the principal.
The two plans discussed above are the most common methods applied for the computation of loan payment on long-term investments. In addition, it is possible for the lenders to use the balloon system in order to decrease the size of the periodic payments.
Long
The Long term refers to owning stocks in corporation or commodities, with expectations of price appreciation. For example when we say that “Somebody is long on gold” this means that this individual has invested in gold and expects rise in the price of gold for extended period of time.
Long Position
The term position covers any commitment to purchase or sell securities and commodities as well as their actual ownership by individuals and legal entities. Long position or long refers to the purchase of a security or a commodity with the idea of earning profits from a future increase in value. In view of foreign exchange, the primary currency is considered long while the secondary is viewed as short. It is important to focus on the value of the particular option, not the instrument itself.
Typically, a long position is established by means of buy order. The investor will profit only in case that the security increases in price. Long may also refer to a long position in futures contracts. The latter represents agreements between the entity which commits to deliver a certain commodity or security (short position) and the party that agrees to accept them (long position). Each futures contract will have specific provisions related to quality and quantity, established price per unit, deadline, and options for delivery. Again, the holder of this position will earn a profit only in case that the value of the futures contract increases. Another alternative is to offset the position by means of counter-contract. Investors who hold long positions are also referred to as bull speculators. The latter covers dealers and speculators who purchase investment portfolios with the intent of selling the securities and commodities at a higher price in the future.
In contrast, short selling refers to the sale of assets, typically securities, which have been borrowed by another entity. The aim is to earn a profit when the value of the asset decreases. The short seller pays smaller amount for repurchasing the assets than he has received for their sale. Naturally, he will loose money if the assets increase in value. Fees related to the assets' borrowing as well as payments for dividends represent additional costs.
Long-Term Debt
Long-term debt refers to liabilities that last longer than a period of one year. They are also referred to as funded debt. The firms are obliged to disclose their long-term obligations on the balance sheet, including the corresponding interest rates and the date of maturity. The long- term debt differs from the company’s long term liabilities. The latter cover the supply of various services that may be paid already. The amount of long-term financial obligations on the balance sheet is essential. Decreasing debt over one or more years is a good sign of the company’s financial health. Firms with extensive amounts of debt may be overwhelmed by interest rates. Moreover, they will have insufficient amount of working capital for their daily operations. These factors may ultimately result in bankruptcy.
The debt typically consists of business loans, mortgages, notes and bonds with maturities over one year, and others. Debentures represent a form of bonds that are not secured by the company’s assets. However, they are accepted by the investors if the firm has a good credit standing or guarantees considerable earnings' rate. Mortgage bonds, on the other hand, are secured by some form of lien such as plant buildings and equipment. Securities such as T-bills are short-term debt because their maturities are shorter than the stated period.
Most lending institutions prefer log-term loans and unsecured loans due to the comparative predictability of their repayment rates. The majority of the lending institutions will conclude long-term debt agreements if the company’s assets and leverage are adequate. Long-term loan lenders include: the banks, trust and insurance companies, multiple loan specialists, as well as the pension funds. Typically, long periods of stable sales and profits facilitate the use of long-term financial obligations. Other factors in favor of long-term debt include: large profit margins, potential increase in profits, low price-earnings ratio with regard to the interest rates, and expected increase in the price levels.