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Glossary of Important Financial Terms

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Term Definition

Sometimes known as accounts payables or trade payables. These are a type of short-term liability owed to suppliers and business partners. This is as opposed to loans which are owed to banks and other financial institutions.


One hundredth of a cent or similar monetary unit (as applied to foreign exchange)

Plant, Property and Equipment (PPE)

Facilities and machinery that a company utilises as factors of production. PPE is shown as non-current assets on the balance sheet. They are typically depreciated over time and may be replenished via capital investments

Price-Earnings Ratio (P/E)

The ratio of the price of a share to its latest profits per share. It is a measure of the priciness of a company's shares relative to its profits. The lower the P/E ratio, the better.

Priice/NAV Ratio

The ratio of share price to the net asset value per share of a company. It is an indication of the market's valuation of a company relative to the underlying assets backing each share. A low Price/NAV does not necessarily imply that a share is undervalued. It may be because the company is not generating a high enough return relative to its assets, or that a company is viewed as operating in a low growth or matured industry.


A term used to denote a bank’s most favoured (low risk) customers. Prime rate therefore refers to the lowest interest rate that a bank will be willing to lend at.

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