Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 57 terms
Everything a company owns or is owed — cash, receivables, inventory, fixed assets, goodwill and investments.
One half of an identity that always balances, because every rupee of asset was funded either by a lender or by an owner.
A balance-sheet classification for assets and liabilities whose value is expected to be recovered principally through a sale rather than through continuing use.
Made before the sale completes, and it pulls the division out of its usual lines into one block. Depreciation on those assets stops from the date of classification.
Assets Under Management — the total money a fund or manager runs.
A very large smallcap fund cannot buy small companies meaningfully. Size constrains strategy.
Tier 1 plus Tier 2 capital divided by risk-weighted assets — the regulatory ceiling on how much a lender may carry against its own capital.
The plate on the lorry door. All the borrowers and all the funding in the world do not raise it, so a book growing faster than capital has a dated appointment with a share issue.
Return on assets — net profit as a percentage of total assets.
Unlike ROE it cannot be lifted by swapping equity for debt, because the borrowed money still sits in the asset base. Most informative for banks and lenders, where the assets are the business.
Assets scaled by prescribed risk weights, so that a loan against a house and an unsecured personal loan of the same size do not consume the same capital.
What a lender lends against decides how much it can lend. A change to a weight is a decision taken elsewhere that can end a growth plan without a rupee moving anywhere.
Credit-impaired loans under the expected credit loss framework — being more than ninety days overdue is treated as default unless the lender can demonstrate otherwise.
They cost a lender twice: the provision rises, and interest is thereafter recognised on the amount net of that provision, so income falls at the same moment the charge goes up.
Shares, deposits and fund units whose owners or heirs have not come forward to claim them.
Thousands of crores sit unclaimed in India — mostly because nobody registered a nomination.
Interest income divided by average interest-earning assets — what a lender earns on what it has lent.
Half of the spread, and the half that is easiest to misread. A high yield is not skill; it is the price of the risk the lender agreed to carry, and the credit cost line is where that bill arrives.
Net profit minus operating cash flow, divided by average total assets.
Sustained above about 10% deserves an explanation. The multi-year trend matters far more than any single year.
Whether reported assets are genuinely worth their carrying value.
Inventory composition and asset lives are where it shows first.
Revenue divided by assets — how much sales each rupee of assets generates.
It collapses during a capex cycle because capital arrives before revenue does.
A statement of assets, liabilities and equity at a single point in time.
A photograph, not a film. Where fragility shows up before it reaches profits.
The costs and obligations that keep a participant producing even when it is unprofitable — single-purpose assets, high fixed costs, workforce and contractual obligations, and lenders who prefer a running asset to a distressed sale.
Everybody studies barriers to entry. Barriers to exit decide how deep a downturn gets and how many years it lasts, because loss-making capacity keeps running while it covers its cash costs.
Total assets minus total liabilities — the accounting net worth attributable to shareholders.
Meaningful for banks, nearly useless for a software company.
Splitting a corpus by time horizon so near-term spending never depends on volatile assets.
Two years of spending in cash, the next few in debt, the rest in equity. You are never a forced seller.
Capital expenditure — cash spent acquiring or maintaining long-term assets.
Growth capex builds the future; maintenance capex just stops the present from falling apart.
Capital spending incurred on assets not yet ready for use.
Money spent that earns nothing yet, sitting in assets and dragging return ratios down.
Income on assets gifted to a spouse or minor child being taxed in the giver’s hands.
The reason investing in a minor’s name gives no tax advantage while they are still a minor.
The degree to which two assets move together.
Five banks is one bet, not five positions. Correlation is hidden concentration.
Current assets divided by current liabilities.
Below 1 means more is due within a year than is available within a year.
The accounting test that decides whether transferred assets leave the balance sheet: have substantially all the risks and rewards passed to the buyer?
One question with two entirely different sets of financial statements behind it. Yes, and the loans go and a gain is booked now; no, and they stay and the cash received is a borrowing.
Average total assets divided by average net worth — how many rupees of assets each rupee of owners’ money carries.
The second term in return on equity. It magnifies a bad year by exactly the factor it magnifies a good one, which is why two lenders with the same headline return are not the same investment.
The annual fee a fund charges, expressed as a percentage of assets under management.
Charged on your whole balance every year whether the fund wins or loses. It is the one certainty in investing.
Gross non-performing assets — the share of a bank’s loans that have stopped being repaid.
The single most important number for any bank. Below 2% is healthy; above 6% is a crisis.
The premium paid over fair value of net assets in an acquisition, carried on the balance sheet.
A standing candidate for future write-offs. Treat large goodwill with scepticism.
An exchange framework applied to securities whose financials look weak against the price — net worth, net fixed assets, book value — escalating through stages of progressively tighter conditions.
The more severe of the two frameworks, and the one pointing at the accounts rather than at the tape. At the top stages trading falls to one session a week, so the exit stays open while its timing and its price stop being yours to choose.
Assets received on the death of the previous owner.
Untaxed on transfer in India, but the original cost and holding period carry over to you.
The cash flow bucket covering money spent on or received from long-term assets such as plant, equipment and acquisitions.
Negative is the normal state for a company still building something. Persistently positive usually means assets are being sold, which flatters this year and shrinks the next one.
The share of a fund’s assets held by its largest investors, disclosed alongside the liquidity stress test.
It tells you how few decisions it would take to produce a large redemption. A fund whose top holders own a big slice can face an exit that no retail pattern would ever generate.
Yield on assets minus cost of funds — two rates, subtracted.
The measure a capital raise cannot flatter. Net interest margin rises when more of the book is funded by shareholders’ money; the spread, being a difference of two rates, cannot move for that reason.
What would remain for shareholders if the assets were sold off and every liability settled — assets at realisable prices, not book values.
A floor rather than a valuation. Useful where the assets could actually be sold; close to meaningless for a business whose value walks out of the building each evening.
The trust, and its trustees, that legally hold a scheme’s assets on behalf of the unitholders.
The assets belong to the trust for you, not to the AMC. A prescribed majority of trustees must be independent of the sponsor, which is the whole point of having them.
Net interest margin — net interest income divided by average interest-earning assets.
Never read it without GNPA: a rising margin earned by lending to riskier borrowers is not skill. It is also not the same number as the lending spread, because the margin counts the assets funded by the lender’s own capital, which cost nothing.
Naming the person to whom an institution may release assets on the holder’s death.
Five minutes now, or two years of paperwork for your family later.
The formal division of HUF assets among coparceners, dissolving the entity.
Far easier to create an HUF than to unwind one — partition needs agreement from everyone.
The method used for a common-control combination: assets and liabilities carried across at existing book values, with the difference taken to a capital reserve.
No goodwill arises, which is the fingerprint. A capital reserve moving instead of goodwill appearing tells you a group reshuffle happened rather than a purchase.
Current assets excluding inventory, divided by current liabilities.
The stricter liquidity test — because unsold stock in a downturn is exactly what you cannot convert to cash.
A security interest created over a company’s assets in favour of a lender, recorded against that company in the public register of charges.
A dated, public record of who lent to which entity and what was pledged. Unsecured borrowing creates no charge, so the register is one side of the picture rather than all of it.
What it would cost to build the same assets today.
Why a cyclical trading well below replacement cost is a real observation — and why nobody builds new capacity at the bottom.
A market environment in which participants favour riskier assets.
Smallcaps and high-multiple names lead. When it flips to risk-off, they lead downward.
The risk that short-dated borrowing cannot be reissued when it matures, even though the borrower is solvent and the underlying assets are unimpaired.
Fifteen years of ninety-day paper is about sixty separate lending decisions. The exposure is to the worst of them rather than the average, and the cause of a bad week is often nothing to do with the borrower.
A statutory scheme under which a failing bank’s assets and liabilities are taken over by a stronger institution.
The route that has generally protected depositors above the insured limit, because deposits are liabilities the acquirer assumes. Shareholders in the same transaction are frequently written down to nothing.
A debenture with specific assets charged against it.
It improves your place in the queue. It does not guarantee recovery — check what the security actually is.
Disclosure of revenue, result and assets for each reportable business division.
Consolidated numbers average a great business with a poor one. This note separates them.
A unit of ownership in a company, carrying a proportional claim on its profits and assets.
A legal slice of a real business. Own 1% of the shares and you own 1% of the company.
Book value with goodwill and intangible assets removed.
The conservative floor. Goodwill is the premium paid in past acquisitions, and it goes if those disappoint.
The Indian tax law's term for crypto and similar assets, taxed at a flat 30% with 1% TDS and no loss offset.
Being taxed is not the same as being regulated. The state will tax the gains; it will not help recover the capital.
A legal document determining who inherits your assets.
A nominee receives; a will decides who owns. You want both, and you want them to agree.
Current assets minus current liabilities — the capital tied up in day-to-day operations.
Negative working capital is often excellent: customers pay you before you pay suppliers.
Net worth divided by the number of shares outstanding.
The anchor of a lender’s valuation, because its assets are financial and its return is earned on the capital base. For a business whose value sits in brands or people it says very little.
An arrangement in which a finance company originates and services a loan while retaining an agreed minimum share of it, and a partner bank funds the rest from the outset.
Only the company’s own share is ever on its balance sheet, while the whole loan is generally counted in assets under management — which is one reason the two series grow at different rates.
Hindu Undivided Family — a family unit recognised as a separate taxpayer with its own PAN.
A second exemption limit and slab progression. Only helps for genuinely shared family assets, not your salary.
A write-down of a long-lived asset or goodwill.
A large one in a new CEO’s first year usually means assets were overstated before.
Price divided by book value per share.
Essential for banks. Nearly meaningless for asset-light businesses whose real assets are people.
How much of a fund’s portfolio was bought and sold during the year.
A cost paid from the fund’s assets before the NAV you see. 200% means the whole portfolio changed twice.
Accepting deposits outside every regulated category, banned outright by a 2019 Act that lists the deposit schemes which remain lawful.
The Act lets authorities attach assets and repay depositors through designated courts. Worth knowing it exists, and worth knowing that recovery is a fraction and takes years.