Market value ratios

Similar financial terms

Mark-to-market
The practice of revaluing an instrument ot reflect the current values of the relevant market variables.

Inverted Market
A market where futures prices decrease with maturity.

Gray market
An unofficial market where new share issues are bought and sold before they officially become available for trading on the stock exchange. The same logic applies to the forward market for newly issued bonds market - bonds are traded before the final terms on the bond are negotiated.

Bull market
General market condition characterized by optimism, rising prices in stocks, and a belief that near-term future will see higher market prices for stocks.

Bear Market
An extended period of general price decline in an individual security, an asset, or a market.

Market Close
The term market close refers to the time of day that a market closes. In the 24h foreign exchange market, there is no official market close. 5:00 PM EST is often referred to and understood as the market close because value dates for spot transactions change to the next new value date at that time.

Efficient market
A theory about the stock market stating that the current prices of stocks reflect all that is known about the company at that moment, and that new information is reflected immediately in changes to that stock's market price.

Yankee market
The foreign market in the United States.

Middle East dollar market
A Middle East dollar market exists in Bahrain where eurodollars and other currencies are intermediated in by a number of Arab and non-Arab banks. Collectively these various regional banking centres make the eurocurrency market one of the largest moneymarkets in the world.

Upstairs market
A network of trading desks for the major brokerage firms and institutional investors that communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.

Two-sided market
A market in which both bid and asked prices, good for the standard unit of trading, are quoted.

Tight market
A tight market, as opposed to a thin market, is one in which volume is large, trading is active and highly competitive, and spreads between bid and ask prices are narrow.

Third market
Exchange-listed securities trading in the OTC market.

Thin market
A market in which trading volume is low and in which consequently the bid-ask spread are wide and the liquidity of the instrument traded is low.

Technical condition of a market
Demand and supply factors affecting price, in particular the net position, either long or short, of the dealer community.

Stock market
Also called the equity market, the market for trading equities.

Specific issues market
The market in which dealers reverse in securities they wish to short.

Security market plane
A plane that shows the equilibrium between expected return and the beta coefficient of more than one factor.

Security market line
Line representing the relationship between expected return and market risk.

Secondary market
The market where securities are traded after they are initially offered in the primary market. Most trading is done in the secondary market. The New York stock Exchange, as well as all other stock exchanges, the bond markets, etc., are secondary markets. Seasoned securities are traded in the secondary market.

Samurai market
The foreign market in Japan.

Rembrandt market
The foreign market in the Netherlands.

Real market
The bid and offer prices at which a dealer could do "size." Quotes in the brokers market may reflect not the real market, but pictures painted by dealers playing trading games.

Primary market
The first buyer of a newly issued security buys that security in the primary market. All subsequent trading of those securities is done in the secondary market.

Market-to-Book
Compares a stock's market value to the value of total assets less total liabilities (book value). Determined by dividing current stock price by common stockholder equity per share (book value), adjusted for stock splits. Also called Price/book ratio

Perfectly competitive financial markets
Markets in which no trader has the power to change the price of goods or services. Perfect capital markets are characterized by the following conditions: a) trading is costless, and access to the financial markets is free, b) information about borrowing and lending opportunities is freely available, c) there are many traders, and no single trader can have a significant impact on market prices.

Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy in a perfect capital market.

Perfect market view (of capital structure)
Analysis of a firm's capital structure decision, which shows the irrelevance of capital structure in a perfect capital market.

Perfect capital market
A market in which there are never any arbitrage opportunities.

Over-the-counter market (OTC)
A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked together by telephones and computer screens. The market is for securities not listed on a stock or bond exchange. The NASDAQ market is an OTC market for U.S. stocks.

Operationally efficient market
Also called an internally efficient market, one in which investors can obtain transactions services that reflect the true costs associated with furnishing those services.

Open-market purchase operation
A systematic program of repurchasing shares of stock in market transactions at current market prices, in competition with other prospective investors.

Open-market operation
Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.

One-way market
(a) A market in which only one side, the bid or asked, is quoted or firm. (b) A market that is moving strongly in one direction.

Nonmarketed claims
Claims that cannot be easily bought and sold in the financial markets, such as those of the government and litigants in lawsuits.

New-issues market
The market in which a new issue of securities is first sold to investors.

Negotiated markets
Markets in which each transaction is separately negotiated between buyer and seller (i.e. an investor and a dealer).

Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.

Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the home currency value of a foreign currency transaction.

Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances, commercial paper, repurchase agreements and government bills. The net asset value per share is maintained at $1. 00. Such funds are not federally insured, although the portfolio may consist of guaranteed securities and/or the fund may have private insurance protection.

Money market demand account
An account that pays interest based on short-term interest rates.

Money market
Money markets are for borrowing and lending money for three years or less. The securities in a money market can be U.S.government bonds, treasury bills and commercial paper from banks and companies.

Marketplace price efficiency
The degree to which the prices of assets reflect the available marketplace information. Marketplace price efficiency is sometimes estimated as the difficulty faced by active management of earning a greater return than passive management would, after adjusting for the risk associated with a strategy and the transactions costs associated with implementing a strategy.

Marketed claims
Claims that can be bought and sold in financial markets, such as those of stockholders and bondholders.

Marketability
A negotiable security is said to have good marketability if there is an active secondary market in which it can easily be resold.

Market-if-touched (MIT)
A price order, below market if a buy or above market if a sell, that automatically becomes a market order if the specified price is reached.

Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.

Market value
(a) The price at which a security is trading and could presumably be purchased or sold. (b) The value investors believe a firm is worth; calculated by multiplying the number of shares outstanding by the current market price of a firm's shares.

Market timing costs
Costs that arise from price movement of the stock during the time of the transaction which is attributed to other activity in the stock.

Market timing
Asset allocation in which the investment in the market is increased if one forecasts that the market will outperform T-bills.

Market timer
A money manager who assumes he or she can forecast when the stock market will go up and down.

Market segmentation or preferred habitat theory
A biased expectations theory that asserts that the shape of the yield curve is determined by the supply of and demand for securities within each maturity sector.

Market sectors
The classifications of bonds by issuer characteristics, such as state government, corporate, or utility.

Market risk
Risk that cannot be diversified away.

Market return
The return on the market portfolio.

Market prices
The amount of money that a willing buyer pays to acquire something from a willing seller, when a buyer and seller are independent and when such an exchange is motivated by only commercial consideration.

Market price of risk
A measure of the extra return, or risk premium, that investors demand to bear risk. The reward-to-risk ratio of the market portfolio.

Market portfolio
A portfolio consisting of all assets available to investors, with each asset held -in proportion to its market value relative to the total market value of all assets.

Market overhang
The theory that in certain situations, institutions wish to sell their shares but postpone the share sales because large orders under current market conditions would drive down the share price and that the consequent threat of securities sales will tend to retard the rate of share price appreciation. Support for this theory is largely anecdotal.

Market order
This is an order to immediately buy or sell a security at the current trading price.

Market model
This relationship is sometimes called the single-index model. The market model says that the return on a security depends on the return on the market portfolio and the extent of the security's responsiveness as measured, by beta. In addition, the return will also depend on conditions that are unique to the firm. Graphically, the market model can be depicted as a line fitted to a plot of asset returns against returns on the market portfolio.

Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.

Market cycle
The period between the 2 latest highs or lows of the S&P 500, showing net performance of a fund through both an up and a down market. A market cycle is complete when the S&P is 15% below the highest point or 15% above the lowest point (ending a down market). The dates of the last market cycle are: 12/04/87 to 10/11/90 (low to low).

Market conversion price
Also called conversion parity price, the price that an investor effectively pays for common stock by purchasing a convertible security and then exercising the conversion option. This price is equal to the market price of the convertible security divided by the conversion ratio.

Market clearing
Total demand for loans by borrowers equals total supply of loans from lenders. The market, any market, clears at the equilibrium rate of interest or price.

Market capitalization rate
Expected return on a security. The market-consensus estimate of the appropriate discount rate for a firm's cash flows.

Market capitalization
The total dollar value of all outstanding shares. Computed as shares times current market price. It is a measure of corporate size.

Marked-to-market
An arrangement whereby the profits or losses on a futures contract are settled each day.

Make a market
A dealer is said to make a market when he quotes bid and offered prices at which he stands ready to buy and sell.

Locked market
A market is locked if the bid = ask price. This can occur, for example, if the market is brokered and brokerage is paid by one side only, the initiator of the transaction.

Open market purchase
An order placed by an insider, after all appropriate documentation has been filed, to buy restricted securities openly on an exchange.

TMWX (Wilshire 5000 Total Market Index)
The TMWX measures the performance of all U.S. headquartered equity securities with readily available price data.

Market Mix
The description of the four P's of marketing - i.e. Price, Place (Distribution), Product, and Promotion as it applies to a particular commercialization plan.

• Product. The product is the full bundle of goods and services offered to the customer. This includes the appearance, functionality, and support or non-tangibles the customer will receive. The physical product itself is part of product as well as any packaging it arrives in.
• Place. This is where and how your product is di ...
  
  Kerb market
  In the US, trading in shares of companies not listed on the main stock exchange board is reffered to as kerb trading.
  
  In the UK, kerb trading is trading in commodities outside official market hours.
  
  In Australia the term 'kerb market' has been applied to 'junior' shares which have little turnover.
  
  Black market
  An illegal market.
  
  Brokered market
  A market where an intermediary offers search services to buyers and sellers.
  
  Bulldog market
  The foreign market in the United Kingdom.
  
  Capital market
  The market for trading long-term debt instruments (those that mature in more than one year).
  
  Capital market efficiency
  Reflects the relative amount of wealth wasted in making transactions. An efficient capital market allows the transfer of assets with little wealth loss.
  
  Capital market imperfections view
  The view that issuing debt is generally valuable but that the firm's optimal choice of capital structure is a dynamic process that involves the other views of capital structure (net corporate/personal tax, agency cost, bankruptcy cost, and pecking order), which result from considerations of asymmetric information, asymmetric taxes, and transaction costs.
  
  Capital market line (CML)
  The line defined by every combination of the risk-free asset and the market portfolio.
  
  Cash markets
  Also called spot markets, these are markets that involve the immediate delivery of a security or instrument.
  
  Common market
  An agreement between two or more countries that permits the free movement of capital and labor as well as goods and services.
  
  Common stock market
  The market for trading equities, not including preferred stock.
  
  Complete capital market
  A market in which there is a distinct marketable security for each and every possible outcome.
  
  Corner A Market
  To purchase enough of the available supply of a commodity or stock in order to manipulate its price.
  
  Interactive marketing
  Any marketing method that uses electronic communication between the marketer and customer. Web sites, and consumer electronic kiosks are examples of interactive marketing.
  
  Away from the market
  In context of general equities, out of line with the inside market at this time, such as when a bid on a limit order is lower or the offer price is higher than the current market price for the security; held by the specialist for later execution unless fill-or-kill.
  
  Equilibrium market price of risk
  The slope of the capital market line (CML). Since the CML represents the expected return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium. The slope of the line determines the additional expected return needed to compensate for a unit change in risk. The equation of the CML is defined by the Capital Asset Pricing Model (CAPM).
  
  Factor market
  The place where inputs or resources are bought or sold. Factor markets usually refer to labor or capital.
  
  Free market economy
  A system where resources are owned by households: markets allocate resources through the price mechanism; and income depends upon the value of resources owned by an individual.
  
  CARICOM (Caribbean Common Market)
  Caribbean Common Market. Consists of 14 sister-member countries of the Caribbean community. Members include: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent, Surinam, Trinidad and Tobago. They have set as a goal that in 1997 there will be a single market allowing for the free movement of labor. Conspicuous by their absence are the Cayman Islands and the British Virgin Islands, two major players in interna ...
  
  Kerb market
  Kerb market is in fact an unofficial name for an unofficial activity - the trading of securities outside a recognized stock exchange. The name derives from the historical practice of dealers continuing to trade on the pavement after the exchange's hours of business.
  
  Marketed Deal
  An arrangement in a public share distribution whereby the price at which the shares are sold is determined after a period of marketing activities. During the marketing period, the underwriters are able to contact potential purchasers to assess potential demand and price sensitivity. Shares continue to be publicly traded, if they had been previously listed. The underwriters minimize the price risk on resale (thereby lowering the discount to market), but the seller bears a risk of a price decline ...
  
  London Gold Market
  Refers to the five dealers who set (fix) the gold price in London: Mocatta & Goldsmid, N. Rothschild & Sons, Johnson Matthey, Sharps Pixley, and Samuel Montagu & Co.
  
  Terminal Market
  Usually synonymous with commodity exchange or futures market, specifically in the United Kingdom.
  
  Efficient Market
  A market in which new information is immediately available to all investors and potential investors. A market in which all information is instantaneously assimilated and therefore has no distortions.
  
  Market Index Deposits (MIDs)
  Bank certificates of deposit or deposit notes with a return linked to the performance of an index, usually a stock market index.
  
  Principal value
  The amount that the issuer of a bond agrees to repay the bondholder at the maturity date. The principal is also referred to redemption value, maturity value, par value or face value.
  
  Back-end value
  The amount paid to remaining shareholders in the second stage of a two-tier or partial tender offer.
  
  Going-concern value
  The value of a company as a whole over and above the sum of the values of each of its parts; the value of organization learning and reputation.
  
  Terminal value
  The value at maturity.
  
  Book value per share
  The intrinsic value of a company's stock. BVPS is calculated by dividing tangible capital dollar value by the number of outstanding shares of common stock.
  
  Face value
  Alternative name for par value.
  
  Adjusted present value (APV)
  The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out.
  
  Value manager
  A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at or in excess of that value. Often a value stock is one with a low price to book value ratio.
  
  Value dating
  Refers to when value or credit is given for funds transferred between banks.
  
  Value date
  In the market for eurodollar deposits and foreign exchange, value date refers to the delivery date of funds traded. Normally it is on spot transactions two days after a transaction is agreed upon and the future date in the case of a forward foreign exchange trade.
  
  Value additivity principal
  Prevails when the value of a whole group of assets exactly equals the sum of the values of the individual assets that make up the group of assets. Stated differently, the principle that the net present value of a set of independent projects is just the sum of the net present values of the individual projects.
  
  Value-at-Risk
  A value-at-risk (VAR) model is a procedure for estimating the probability of portfolio losses exceeding some specified proportion based on a statistical analysis of historical market price trends, correlations, and volatilities.
  
  Value-added tax
  Value-added tax (VAT) is a method of indirect taxation whereby a tax is levied at each stage of production on the value added at that specific stage.
  
  Utility value
  The welfare a given investor assigns to an investment with a particular return and risk.
  
  Time value of money
  The idea that a dollar today is worth more than a dollar in the future, because the dollar received today can earn interest up until the time the future dollar is received.
  
  Time value of an option
  The portion of an option's premium that is based on the amount of time remaining until the expiration date of the option contract, and that the underlying components that determine the value of the option may change during that time. Time value is generally equal to the difference between the premium and the intrinsic value.
  
  Straight value
  Also called investment value, the value of a convertible security without the con-version option.
  
  Standardized value
  Also called the normal deviate, the distance of one data point from the mean, divided by the standard deviation of the distribution.
  
  Salvage value
  Scrap value of plant and equipment.
  
  Residual value
  Usually refers to the value of a lessor's property at the time the lease expires.
  
  Replacement value
  Current cost of replacing the firm's assets.
  
  Relative value
  The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to another, or for a given instrument, of one maturity relative to another.
  
  Price value of a basis point (PVBP)
  Also called the dollar value of a basis point, a measure of the change in the price of the bond if the required yield changes by one basis point.
  
  Present value of growth opportunities (PVGO)
  The net present value (NPV) of investments the firm is expected to make in the future.
  
  Present value factor
  Factor used to calculate an estimate of the present value of an amount to be received in a future period.
  
  Present value
  The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future.
  
  Par value
  Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.
  
  Original face value
  The principal amount of the mortgage as of its issue date.
  
  Net salvage value
  The after-tax net cash flow for terminating the project.
  
  Net present value rule
  An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.
  
  Net present value of future investments
  The present value of the total sum of NPVs expected to result from all of the firm's future investments.
  
  Net present value of growth opportunities
  A model valuing a firm in which net present value of new investment opportunities is explicitly examined.
  
  Net present value (NPV)
  The present value of the expected future cash flows minus the cost.
  
  Net book value
  The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.
  
  Net asset value (NAV)
  The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.
  
  Net adjusted present value
  The adjusted present value minus the initial cost of an investment.
  
  Loan value
  The amount a policyholder may borrow against a whole life insurance policy at the interest rate specified in the policy.
  
  Liquidation value
  Net amount that could be realized by selling the assets of a firm after paying the debt.
  
  Bond value
  With respect to convertible bonds, the value the security would have if it were not convertible apart from the conversion option.
  
  Book value
  A company's book value is its total assets minus intangible assets and liabilities, such as debt. A company's book value might be more or less than its market value.
  
  Cash-surrender value
  An amount the insurance company will pay if the policyholder ends a whole life insurance policy.
  
  Conversion value
  Also called parity value, the value of a convertible security if it is converted immediately.
  
  Embedded value
  A methodology that reflects future shareholder profits in the life insurance business. Embedded value equals the free surplus plus the value of inforce business. Embedded value is hard to compare with different companies since each company determines its own input parameters, for example the level of target surplus.
  
  Salvage Value
  Is the amount remaining after a depreciated useful life. It refers to the residual or recoverable value of a depreciated asset. It should be noted that the gross salvage value may be adjusted by a removal or disposal cost. This adjustment would lower the gross salvage value.
  
  Extrinsic Value
  The time value component of an option premium.
  
  Short-term solvency ratios
  Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (a) the current ratio, (b) the acid-test ratio, (c) the inventory turnover ratio, and (d) the accounts receivable turnover ratio.
  
  Reserve ratios
  Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a non-interest-bearing account at one of the twelve Federal Reserve Banks.
  
  Rate of return ratios
  Ratios that are designed to measure the profitability of the firm in relation to various measures of the funds invested in the firm.
  
  Profitability ratios
  Ratios that focus on the profitability of the firm. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment.
  
  Liquidity ratios
  Ratios that measure a firm's ability to meet its short-term financial obligations on time.
  
  Leverage ratios
  Measures of the relative contribution of stockholders and creditors, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm.
  
  Capitalization ratios
  Also called financial leverage ratios, these ratios compare debt to total capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.
  
  Common stock ratios
  Ratios that are designed to measure the relative claims of stockholders to earnings (cash flow per share), and equity (book value per share) of a firm.
  
  Coverage ratios
  Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed charge coverage ratio.
  
  Customary payout ratios
  A range of payout ratios that is typical based on an analysis of comparable firms.