Archive for the ‘Investment Terms’ Category

Term of the Day: Minority interest

"Minority interest is defined as the ownership value of an individual or business that owns less than 50 percent of a business. Minority interests develop when businesses merge or a seller retains a small percentage of his recently sold company. Minority interests generally do not have a great economic impact on the financial status of a business, but they are included in the company's balance sheet numbers."

~ Source: eHow

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Term of the Day: ‘Gearing Ratio’

“A general term describing a financial ratio that compares some form of owner’s equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm’s activities are funded by owner’s funds versus creditor’s funds. ~ Source

Financial Term for The Day: Nil Paid Rights

Meaning of Nil Paid Rights

"When a rights issue is announced, existing shareholders have the right but not the obligation to participate. Rights issues are typically offered at a discount to the prevailing market price so allotment letters have a market value and may be traded 'nil paid rights' before payment for the new shares is due. Investors who decide to take up a rights issue cannot sell their nil paid rights." ~ Source: Reuters

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