Investing for Beginners .EU, investing Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.
Benjamin Graham

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Bond Investment: Government Bonds and Corporate Bonds
  Corporate Bonds and Government Bonds   Today I want to discuss another untraditional topic. However, this topic concerns the most traditional investments – bonds. Bonds been used for very long time a

Asset Management
Definition    Asset management which also is called as investment management has many similarities to finance management but investment management is more specific and narrow area of finance. Invest

  A shareholder (stockholder) is a individual or company that owns some shares of stock in a corporation. Technically, every investor who is investing in shares is a shareholder for as long as he holds those s

Dividend Payout Ratio
Payout ratio is a percentage that shows a portion of company’s income distributed as dividends.    Formula Dividend payout ratio = common shares dividends / net income   *For the sam

  Securities are financial instruments that represent rights to some assets. Securities can be listed or non-listed. Listed securities are traded on securities exchanges, which commonly are called as stock exchange

Institutional Investment
  Institutional investment is an investment that is made by an organization/institution. Usually, institutional investments are large scale and has important role in financial markets. Most institutional investment

Institutional Investor
  An institutional investor is an investor that is a corporation/institution. Institutional investors have high impact to investment markets and sometimes decisions of most known institutional investment manag

Investment Banking Services
Investment banking services are corporate finance services provided by investment banks. Investment banking includes such services like capital rising, securities issuing, IPO’s running, mergers and acquisitions

Business Organization Forms
  Business organization forms may be different vary over countries depending on corporate law. The most popular classification, also applied in US classifies such forms: Sole proprietorship Partnership Limited

Sole Proprietorship
  A sole proprietorship is form of business that is owned by one individual. The main advantage of the sole proprietorship is the simplicity of starting business in this form. No weighty investments are needed. The

  A corporation is a legal business form that is dominating over capital world. Most of the biggest businesses in the world are working under corporation form. Capital raising, transferring of shares, mergers &

Limited Liability Company
  A limited liability company (LLC) is a business form that has the same advantage like corporations have: a limited liability. Owners of LLC risk only their capital that was invested in company. Limited liability

Publicly Owned corporation
  A publicly owned corporation is a company, which has its shares listed on the stock exchange. A publicly owned companies normally are medium or large scale corporations owned by a large number of investors (both

Penny Stocks
  Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc

Investment Market
  An investment market is a part of a financial market and represents all investments that were issued by corporations, governments or other entities. All the trades made by retail and institutional investors can b

  A takeover is an acquisition of publicly owned corporation by another company. If non-control stake is acquired, it is not yet a takeover. The takeover occurs only when the acquirer gets a control to form managem

Corporate Finance
  Corporate finance is a niche of finance that deals with financial questions related to corporations.    The main goal of every company should be stockholders wealth maximization, but to achieve that m

Corporate Investment
  A corporate investment is investment made by one corporation into another. All corporations try to keep the growth of the business. Some do it only organically, while others also proceeds mergers & acquisitio

Working Capital
  Working capital can be calculated from balance sheet data. There are few ways to calculate working capital, but the most accurate is this one (for operating working capital):   Working capital = total curr

  M&A (mergers & acquisitions) is a field of corporate finance in which corporations are acquiring other companies or are merging in between. Theoretically it doesn’t sound very impressive, but in rea

  An acquisition is a takeover of one corporation by another when shares are bought and control of management is overtaken. Acquisition is an M&A deal and as targets for acquisition usually become some competin

Hostile Takeover
  A hostile takeover is an acquisition of a target company when its management doesn’t want the company to be overtaken by another corporation. The target of a hostile takeover may be only listed company whic

Friendly Takeover
  A friendly takeover is an acquisition of a target company when its management doesn’t resist to be overtaken by another corporation. Most the deals in M&A are friendly when management of one company neg

Poison Pill
  A poison pill is one of the strategies used to avoid hostile takeover. Poison pills are some rules in company’s charters that give some extra rights for corporation. Poison pills may be rights to acquire mo

  An underwriter is a company (normally an investment bank) that organizes the selling of new security issues for the corporations. It is a financial intermediary that buys new issues of securities (shares or bonds

Go Public
  Go public means to get company’s shares listed on the stock exchange; the process also called floatation. To go public, company has to hire some investment banking firm that would help to execute an IPO (in

  Floatation means going public through an IPO. If companies go public they have to get listed their shares on some stock exchange. Each company’s may choose any stock exchange, but normally smaller companies

Voting Right
  A voting right is a right provided by every common stock to participate in a shareholders’ meeting and vote for the decisions as management election, audit company election and other important questions. Us

Personal Investing
  Personal investing is investing when investments are made by an individual but not a corporation which is corporate investment.   Personal investing is a part of personal finance that is responsible for pe

Small Business Valuation
  Small business valuation is not much different from standard business valuation. However, small business valuation is faster to perform because there is less financial and business data to analyze and less time c

Private Equity Investor
  Private equity investor is a corporation or individual that is investing in stakes of unlisted companies. The only different between equity investor and private equity investor is that the last one invests in unl

Balance Sheet
  Balance sheet is one of the three main financial statements (others are income statement and cash flow statement). Balance sheet also might be called a statement of financial position because this statement expla

  Profit is a term used in various finance fields and may have many meanings. Basically profit is the positive difference between the income and costs. If costs are higher than income, then instead of profit loss w

  Loss (net loss) is a financial situation of the company when its revenue is lower than expenses. It is natural that every company tries to receive a profit instead of a loss, but not every succeeds that. Some com

Share Issue
  Share issue may refer to a new share issue or an existing one. An issue of new shares is associated with capital increase of a company during IPO (initial public offering) or SPO (secondary public offering). All

Annual Report
  Annual report is a report on company’s activity issued each year. Not every company issues an annual report and mostly such reports are issued by public companies or those that are preparing going public.&n

  CFROI or cash flow return on investment is a rate of return that measures the performance of corporation based on its cash flow generation ability. CFROI is not very popular but is still used by some companies an

Total Debt Ratio
  Total debt ratio compares total liabilities to total assets. The higher ratio represents riskier situation. And if this ratio is equal to 1.0, it would mean that liabilities are equal to assets or in other words

Privately Held corporation
  Privately held corporation or closely held corporation is a company, which doesn’t have its shares listed on the stock exchange. If a corporation is closely held it not necessary means that it is small busi

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