Glossary of Terms (F - L)

[a - e] [m - r] [s - z]

Financial Analyst
Also called an industry analyst. A person in a financial organization who studies a number of companies, generally in one industry, and makes recommendations about which stocks to buy or sell.

Fiscal Year
An accounting period consisting of any 12 consecutive months. A fiscal year can be the same as a calendar year (January through December) or different from a calendar year. For example, a fiscal year can begin in July 1st of one year and end on June 30th of the following year.

GAAP
Generally Accepted Accounting Principles GAAP represents a set of agreed-upon standards for financial reporting.
Income statement A financial statement that summarizes the company's operating results for a specific period. This statement lists a company's revenues (also called income or money earned) and expenses and shows if a company made money (net income) or lost money (net loss) over the fiscal year.

Index, Indices or Indexes (pl.)
An unmanaged group composed of either stocks or bonds set up for the purpose of tracking the performance of those securities. An index is often used as means of measuring market performance.
An index may be broad based, which means it's composed of securities from a variety of industries. For example, the NSE Index is broad-based index of all the stocks listed on the Nigerian Stock Exchange

Inflation
Generally calculated as a percentage, the sustained increase of prices over a period of time.

Interest
Expressed as a percentage, generally, this is a fee paid by a borrower of money to the lender.

Investment Advisor
A company or individual providing investment advice for a fee. A mutual fund will hire an investment advisor to manage the fund's assets. That investment advisor will assign specialists called portfolio managers to manage the fund's investments according to the fund's stated investment objective.

Investment Company
A firm that, for a fee, uses the money it raises by selling shares to invest in stocks, bonds or both.

Investment Objective
The identified or stated goal - such as growth, capital appreciation or income - that an investor or mutual fund pursues. In the case of a mutual fund, the investment objective is explained in the prospectus.

Investment Risk
The possibility of an investment losing money or not gaining as much in price as expected.

Issuer
The company, municipality or government agency that issues a security, like a stock or a bond.

Letter to Shareholders
A letter from the company's top executive, which usually provides an overview of the company's performance over the past year and the mission of the company.

Liability, Liabilities (pl.)
Anything that a company or individual is required to pay back, like a debt or loan.

Load
Also called a sales charge. Some mutual fund distributors charge this fee to shareholders to compensate the salesperson and/or firm that sell shares of the fund. This fee is outlined in a fund's prospectus.

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