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 61 terms
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.
Total assets minus total liabilities — the accounting net worth attributable to shareholders.
Meaningful for banks, nearly useless for a software company.
Equity Linked Savings Scheme — a fund category required to hold at least 80% in equity, carrying a three-year lock-in and a tax deduction available under the old regime.
The lock-in is described as the cost and is arguably the benefit: three years in which you cannot redeem in a panic.
The extra return an investor expects for holding a risky asset rather than a risk-free one.
Compensation for enduring drawdowns, not a payment that arrives on schedule. It shows up over decades and can be absent for years at a stretch.
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.
Total borrowings divided by shareholders’ equity.
Above 2 means lenders fund the business more than owners do — and lenders get paid first.
Total borrowings divided by shareholders' equity.
A ratio that trebled for many Indian retailers in FY20 without any borrowing happening — the leases were always there, they were just not written down.
The return on equity a regulator permits an asset to earn, built into the allowed revenue alongside approved capital cost, depreciation, operations and maintenance and interest.
The commission sets a return rather than a price, so the analysis moves to the allowance and the disallowances. Regulatory lag is where the margin actually goes: between an input cost rising and a tariff order recognising it, the company funds the gap itself.
A primary financial statement required under Schedule III Division II, showing every component of equity moving from opening to closing balance.
The fourth statement, which almost nobody opens, and the only place the year is laid out reserve by reserve. A translation reserve that has been accumulating for years becomes obvious here and nowhere else.
The split of a portfolio across asset classes such as equity, debt, gold and cash.
Matters more than which stocks you pick. It determines how much a crash actually costs you.
A perpetual, loss-absorbing bond issued by a bank as part of its regulatory capital, ranking just above equity.
Sold on the yield and owned for the yield; designed to be written down in a crisis so that depositors are not. If it pays materially more than a bank deposit, that gap is precisely what it is paying for.
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 rate at which a bank's book value per share compounds — roughly its return on equity less whatever it pays out.
Over long periods the share price tracks this far more closely than it tracks any single year of earnings.
A trade exceeding 0.5% of a company’s equity, disclosed to the exchange the same day.
Free, public data showing who is actually buying in size. Almost nobody reads it.
Decomposing ROE into net margin, asset turnover and equity multiplier.
Tells you whether a high ROE comes from brand power, operational speed, or just debt.
The extended trading session Indian commodity derivatives run after the equity market closes, so that domestic contracts can track international markets while those are open.
It usually carries most of the day’s volume, which means a daily commodity candle averages two very different markets — a thin Indian afternoon and an active overseas evening.
A fund category required to hold at least 65% in equity with no constraint on market cap, leaving the mix to the manager's discretion.
The one people confuse with multicap. A flexicap manager can sit 90% in largecaps when nervous, so in a smallcap crash two funds with almost identical names behave nothing alike.
A schedule, set in advance, for reducing the equity share of a portfolio as a goal date approaches.
It lowers the expected amount and narrows the range of amounts. Written down years ahead it is a rule; decided in the moment it is a market call.
The tendency to hold far more of your own country's equity than its share of global market value would justify.
Partly rational, since you earn and spend in rupees. The problem is that a wholly domestic portfolio stacks your job, your property and your savings on one economy, one currency and one regulatory regime.
A fund holding both equity and debt — aggressive hybrid at 65–80% equity, conservative hybrid mostly debt, and balanced advantage funds varying the split by a valuation model.
Tax treatment usually drives the choice: an aggressive hybrid is taxed as equity, a conservative one as debt. With balanced advantage funds the rules vary enormously, so read the methodology rather than the category name.
Long-term capital gains — profits on listed equity held over twelve months, taxed at 12.5% above a ₹1.25 lakh annual exemption.
Many investors deliberately harvest gains up to the exemption limit each year.
The largest peak-to-trough fall in an equity curve.
Return is what a report advertises; drawdown is what you actually live through.
National Pension System — a low-cost retirement account allowing up to 75% equity, locked until 60.
Very cheap equity exposure with a rigid retirement condition and a mandatory annuity at the end.
Return on capital employed — operating profit as a percentage of debt plus equity.
The honest version of ROE. It cannot be manufactured with leverage.
Return on equity — net profit as a percentage of shareholders’ equity.
Can be inflated simply by borrowing more. Always decompose it before admiring it.
Short-term capital gains — profits on listed equity held twelve months or less, taxed at 20%.
Two extra months of patience can be worth 20% of your gain.
Broadly a lender’s own money — paid-up equity and reserves, less prescribed deductions — which absorbs losses first and carries a separate minimum of its own beneath the overall capital requirement.
The tier that cannot be borrowed. Subordinated debt counts towards the second tier and buys growth capacity without diluting anybody, but it never gets you here.
The claim that holding equity for a longer period reduces its risk.
True of the annualised return, which converges roughly with the square root of the horizon, and false of the final amount, whose spread widens over the same years. Most arguments about it are two people each defending one half.
The schedule on which granted employer equity actually becomes yours, commonly over four years with a one-year cliff.
Unvested equity is a retention device, not wealth you own. Counting it in your net worth is how people talk themselves into staying in a job they should leave.
Weighted average cost of capital — the blend of the cost of debt and the cost of equity, weighted by how much of each the company uses.
The formal discount rate for a DCF, which most investors reasonably simplify into a required return by business type. Running the model at three plausible rates says more than deriving one precisely.
A company in which there is significant influence but not control.
Included by the equity method — a share of profit rather than line-by-line consolidation.
A large negotiated trade executed in a dedicated window within a narrow price band, disclosed the same day.
Typically one decision by one large party — a private equity exit, a promoter tranche, a fund taking a position.
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.
The convention that fixes where a platform starts cutting the session into bars — at the opening bell, or on the clock hour.
It only matters for bar sizes that do not divide the session. Two hourly charts of the same Indian equity session, one anchored at 9.15 and one on the clock, share no interior candle at all.
Profit realised on selling an asset, taxed by holding period.
Equity held over a year is taxed more favourably than under. Every switch resets the clock.
The final phase of a decline, marked by heavy-volume selling and widespread exhaustion.
The mood is not caution — it is disgust, and people questioning whether equity works at all.
An agency’s assessment of a borrower’s ability to meet debt obligations on time.
Free, detailed research answering the one question equity analysts skip: can this company survive?
A private venue where large orders are matched away from the public order book, common in some foreign markets.
Indian cash equity trading is overwhelmingly on-exchange and visible. Large negotiated trades go through the exchange block-deal window and are disclosed the same day.
How large a fall in portfolio value can be absorbed without forcing a sale or altering your plans.
Equity does not become riskier as you age; this falls. The same 40% fall is a few months of saving at 25 and a permanent reduction in what can be spent at 58.
A charge deducted when units are redeemed within a specified period.
Usually 1% inside a year on equity funds. Switching schemes triggers it too.
The return an asset can reasonably be projected to deliver over a long horizon.
Earnings growth plus dividend yield, plus or minus re-rating. Plan at 10–11% for Indian equity.
The reserve accumulating exchange differences arising on translation of an overseas subsidiary’s accounts into the reporting currency.
It can build quietly across six years of annual reports and is only properly visible in the statement of changes in equity. It reaches the profit line exactly once — when that operation is disposed of, which may be never.
The time remaining before a particular goal needs the money.
Money needed within five years does not belong in equity, and money not needed for fifteen probably should be — applied goal by goal rather than by any formula based on your age.
The value of your remaining lifetime earnings, counted as an asset alongside the portfolio.
At 25 it is by far the largest holding and it is largely uncorrelated with the market, which is the real reason a young person can carry a high equity share. By 55 the ratio has inverted.
A formal process for resolving a company that cannot pay its debts.
Equity ranks last. When lenders take haircuts, there was nothing left below them.
Operating profit divided by interest expense.
Debt-to-equity says how much is borrowed; this says whether the company can actually afford it.
The gap between short-term interest rates in two currencies, which sets the forward premium and therefore the slope of a currency futures curve.
The same idea as cost of carry in an equity future, met on a currency chart. It is a financing number, not a view about either currency.
Investing a large sum in a single transaction rather than spreading it across time.
It wins more often than staggering, because markets rise more often than they fall. It also produces the one experience — everything deployed the week before a 20% correction — that makes people abandon equity altogether.
Replaying a set of outcomes in many random orders to see the range of results the same edge could produce.
Your equity curve was one shuffle of the deck. This deals the same cards again a thousand times and shows the hands you might just as easily have got.
Gains and losses that Ind AS routes directly into reserves, presented below net profit and excluded from earnings per share.
The half of the year earnings per share never sees. It still lands in equity, so return on equity can improve on an entirely unchanged business simply because a large OCI loss shrank the denominator.
A return distribution in which a small number of very large outcomes pull the mean well above the median.
The shape equity returns actually take. Downside stops at −100% and upside does not, so a handful of holdings produce nearly the whole result and the typical one disappoints.
Market capitalisation divided by book value.
Only compares businesses whose value sits on the balance sheet, and only means something read alongside return on equity.
A tolerance around a target allocation, breached only when a sleeve drifts beyond it.
What turns "stay mostly in equity" into a rule you can check in ten seconds.
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.
Systematic Transfer Plan — moving a fixed amount from one fund to another at intervals.
The sensible way to deploy a lumpsum into equity instead of putting it all in on one day.
A government savings scheme for a girl child under 10, with a fixed rate and tax-free returns.
Excellent for the portion that must be certain. It is debt, so pair it with equity for an 18-year horizon.
A mechanism that adjusts the price at which units are transacted during heavy flows, so that the cost of trading the portfolio falls on the investors causing it rather than on those who stay.
Not available to an Indian equity scheme meeting redemptions. Its absence is why a manager under liquidity pressure reaches instead for the blunter tool of limiting the money coming in.
How long money can stay invested before it is needed.
It determines the sensible equity share and almost nothing else does. Twenty years is still a long horizon.
Net profit plus other comprehensive income — the final line of the statement of profit and loss.
The number that actually reconciles to the change in equity. If it sits close to net profit, nothing here needs your attention; if the two diverge by hundreds of crore, the profit line is half the year.
Amounts owed to suppliers for goods and services received in the ordinary course of business.
Funding with no interest line, no covenant and no credit rating, and none of it appears in borrowings, net debt to EBITDA or debt-to-equity. It is repayable on demand in the only sense that matters: the supplier can stop supplying.
The statutory order in which claims are paid in an insolvency.
Costs, secured creditors, workers, unsecured creditors, government, then equity. Equity usually gets nothing.