Investing for Beginners .EU, investing

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Bernard Baruch

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Investing in Africa
Investing in Africa even sounds a little extreme. But investing in Africa not only sound extremely - it is like this in fact. If we would distinguish developed and emerging markets, then most of the Africa’s countr
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Investment in Bulgaria
  Starting from the very beginning I will try to make clear why I am bullish about investing Bulgarian stock market. At first I would suggest to look at the chart below.   Five year Bulgarian stock market in
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What to Do With Investments in Current Turbulence?
  The question is really not an easy one. The problem is that there is no left any good investments on this world. Let’s looks at the most topical investments classes:   Stocks. Even before
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US Debt Relief
  Let me give you few facts at first that we would now what are we talking about: The General government gross debt in percent of GDP in the United States was reported at 83.21 percent of GDP in 2009 (90% of GDP
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Foundation of the Europe’s financial Market
  The key question in Europe now is how European Union will look after few years from now. This question is the most important at these days for all the Europe and may have affect to the entire world.   
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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
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How ECB Is Affecting Investment Markets?
  Today was announced very interesting news. The news is about the fact that ECB (European Central Banks) lends 489 billion of Euros to the banks. It is a really huge amount of capital that flows from ECB to the fi
http://www.investingforbeginners.eu/how_ecb_is_affecting_investment_markets-p0-i18

Problems in Greece: Is It Going to End?
  Greece sounds like a curse for all investors and all other participants of the financial market. Yes, it is a small country compared to the global or European economy by the size of a GDP or other economical indi
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Baltic Investment
  Baltic Stock Exchange   Baltic stock exchange now belongs to the world gigantic stock exchange NASDAQ OMX, and now is called NASDAQ OMX Baltic. Historically Lithuania, Latvia and Estonia had their own nati
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European Dividend Stocks
  Before getting to the exact stocks, at first, please let me explain why I have chosen European dividend stocks as a topic. For the beginning, lets solve the question why dividend stocks. The true is that many inv
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Investment psychology gains momentum in contemporary business world
  Many individuals make rational investment decisions, but others are swayed by their emotions, serving as clear-cut illustration of just how the mindset and behavior can affect finances, and this is an important a
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Learning the basic investment concept: a good start in investing
The first step in investing is learning the investment concept itself. It is very important that you understand the basic rules in investing in order for your investment to profit and to prevent losses. As we all know,
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Investing in financial institutions: why and how?
  A banking expert had said that conducting a thorough study on the financial health of a bank or credit institution is very important in investing. Actually, this is the investor’s primary homework, and this
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Investments
(Are you looking for investment definition?)   Investments are instruments that allow us to receive a higher amount of money than was spent. If someone spends 10 euros or dollars and he knows that he will receive
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Interest Coverage Ratio
  Interest coverage ratio shows company’s ability to pay interests for its financial debts. Interest coverage ratio is a ratio between operating profit (EBIT to be more exact) and expenses for interests. The
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Sortino Ratio
  Sortino ratio is a financial ratio that is used to measure the performance of investment portfolio and is very similar to a Sharpe ratio. The main difference between Sortino ratio and Sharpe ratio is that Sharpe
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Derivatives
Derivative financial Instruments Derivatives are so called because they are constructed from other traditional securities, and operate the rights to them. Apart from the fact that there are some basic derivative instrum
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Investment in Stocks
Stocks (shares) are investments that attract the most attention in financial markets, and perhaps stocks are worth it, because investors can expect the highest return from stocks among the range of traditional investme
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Investing for Retirement
Investing for retirement may be one of the most reasonable investment objectives. Sometimes, people invest so they can afford expensive things that they otherwise could not afford without investing. For example
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Investment in Bonds
Debt (fixed income) securities Bonds are fixed income securities and the principle of them is simple - the issuer of the bonds attracts the money from the investors and commits to pay back for the investors until end of
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Investment in Cash
Bank (saving) Accounts, Deposits, Deposit Certificates, Treasure Bills, Money Market Funds When we are talking about investment, cash is not only the real paper (or metal) money that are held in the wallet or under the
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Investment in Commodities
Investment in Oil, gold, Silver, Copper, Wheat  Commodities (raw materials) are indeed a tangible asset class, but it can be also assigned to financial investments, because in current days most investments in commo
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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
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Non-financial Investments
  When talks go about investing and investments everybody focuses on financial investments forgetting that spectrum of investments is much broader. Investment in non-financial investments is also popular, especiall
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Terminal Value
  Terminal value is a value of the business (or other asset) used in discounted cash flow (DCF) method that is added after the discontinuing of the cash flow forecasting.   DCF valuation is based on the sum
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Investing in Commodities Directly
Investment in Oil, Gold, Silver Directly   Commodities has been already described as financial investment. It was assigned to financial investments because investors are investing in commodities not directly but w
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Direct Investment
Investment in Tangible Assets   Direct investment are very wide issue to study, but it‘s not so close to traditional investing. Direct investments are more related with business development and would depend
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Investment in Futures
  Futures - derivative financial instruments, which can help to acquire some object in the future with pre-agreed price.In the case of futures, the seller undertakes to sell the object, while the buyer to purchase
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Investment in Forwards
Forwards – derivative financial instruments almost identical to the future contracts. This contract represents the parties committed to sell and buy the object at the predetermined time and price.Difference between
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Investment in Options
  Options are very known derivatives and especially popular among investing speculators. Options has some attraction: every successful prediction can grow up invested amount a lot of times very quickly and potentia
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Investment in Swaps
  Swaps - an investment tool used rarely at investing process. Typically, these contracts are used by financial institutions or other big companies in order to exchange cash flows in different currencies. In fact,
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Investment in Actively-Managed Funds
Active Mutual (Investment) Funds Actively managed investment funds usually are those mutual funds that choose not copy the index (benchmark), but is trying to beat it, so could give for investing person a higher return,
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Investing Benefits For Beginners
Is the investment really worth it? Many investing beginners ask a question: why to invest?  There can be different answers. Some might even say that is not worth to invest. Why let your money into uncertainty if yo
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Net Debt
  Definition   'Net debt' is used quite often in finance and it is equal to financial liabilities of the company that are reduced by the cash amount (and cash equivalents) that are held by the company. 
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Finance Management
  financial management, asset management, investment management, wealth management in fact are similar processes only called in different names. An investments definition may include both financial assets and real
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Investment Manager
Investment management or finance management are particularly a lot of attention and responsibility requiring areas. It does not matter whether you manage your money whether corporate funds, in any case, it is important t
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Investment Adviser
  Investment advisor/adviser does the same jog as investment consultant does. But investment advisor is a term used by the Securities and Exchange Commission (SEC). So usually investment advisor refers to a company
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Speculation
  Speculation is an investment action made under intentions to earn large profits in short term. Usually such actions are very risky and lays somewhere between investing and gambling. It is hard to say where exactl
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Investment Definition
  Investment definition may have two meanings:   1) An investment as a process (investing) when tangible or financial assets are acquired on purpose to earn more money (or other material benefits) than was s
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Investment Techniques
  Investment techniques are some combination of investment strategies and investment tactics. Investment techniques usually are middle term oriented procedures that help to reach some predetermined result. It may i
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Investment Industry
  An investment industry is a part of whole financial industry of the world. Finance sector includes not only investment industry but also other financial services: corporate finance, public finance, insurance
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Investment Terms
  Investment terms are most popular phrases and word combinations used in investment process. Most of the investment and financial terms you can find on investment dictionary.
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financial Market
  A financial market is a term widely used to describe virtual place/mechanism that allows meeting the sellers and buyers of the investment and other financial products. In current times buyers and sellers do not m
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OTC Market
  OTC (Over-The-Counter) market is decentralized market where financial assets are traded. Decentralized market means a contrast to the exchange trading. OTC market doesn’t have one place (no physical, no vir
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Stock Market
  A stock market represents all the stocks (shares) that are issued and traded or just held. Stock market (equity market) is a part of a whole financial market but more extensive term than Stock Exchange. Stock Exc
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Global financial Market
  A global financial market is a totality of all worlds’ financial markets. Every decent country has a Security Exchange and larger states have few or several of them. As financial markets includes not o
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Bond Market
  A bond market includes all the bonds (debt securities) that are issued and traded or just held. Bond market is a part of a whole financial market.  This market covers all the fixed income securities that are
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Derivative Market
  A derivative market is a totality of derivatives (futures, forwards, options, swaps and other) that have been created over the world. Some of the derivatives are standardized and are traded on Exchanges whil
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Commodity Market
  A commodity market is one of the main financial market parts. Commodities are basic resources that are extracted from earth or are the result from agriculture activities. Some commodities, like cheese are already
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FOREX Market
  FOREX market (foreign exchange market) is a global network of trading in different currencies. It is the most liquid financial market with huge turnovers continuously without breaks. Lot commercial banks, central
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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
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Asset Management
  Asset management is a process when assets acquired, monitored and sold on purpose to achieve optimal investment results. There is no strong difference between investment management and asset management. However,
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Stock Exchange
  A stock exchange is an operator/company that takes bids from the sellers and buyers and executes transactions if conditions allow it. Usually stock exchanges offer trading not only for stocks but also for other f
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Buying on Margin
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth?     Buying on margin gets popularity during every strong bull market. Unfortunately, it be
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Investment Group
  An investment group is an organization, which activity is closely related with investment. Still there can be no exact definition what investment group does because they might have different juridical forms
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financial Investment Group
  financial investment group usually is different from capital investment group. Regularly financial investment group includes a brokerage firm and provides standard functions: financial consultations, investment m
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Venture Capital
  A venture capital is a capital provided by capital investment groups or private equity funds for small start up businesses.   There are not many opportunities for young fast growing companies. If they
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Pension Funds
  Pension funds are investment funds established on purpose to generate income for retirement. They are very useful in economy when society gets older and number of population decreases, because a working class is
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Derivatives
  Derivatives are securities (financial instruments) that are created by financial intermediaries synthetically, and are based on price or value of some primer assets or indicator. Usually such underlying assets ar
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Securities
  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
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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
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Retail Investor
  A retail investor is a small investor, which normally is an individual. Most of the investors in financial markets are retail investors, but retail investor makes an investments in much smaller amounts than
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Blue Chip Stocks
  Blue chip stocks are stocks of the biggest large cap companies. Blue chip stocks usually are safer than average investment in stocks, have stable cash flow and pay stable dividends according dividend policy. Blue
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Investment Report
  An investment report is a for investors prepared document on purpose to provide useful and objective information that would help to make an investment decision.     Investment report may have many for
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Hedge (Hedging)
  Hedge (hedging) is protection of investment portfolio against fluctuations using financial instruments. Hedge is very popular at investment theory, but not so popular at investment practice. In theory everything
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Investment Bank
  An investment bank is a financial institution that has a license of bank and specializes exclusively on investment services. In the USA investment banking services was separated from other banking activity u
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Business Valuation
  The goal of business valuation is to determine the correct market value of a business. Usually business valuation is performed by professional valuators / assessors who have required qualifications for the job.&n
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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
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Brokerage Company
  A Brokerage Company is a financial institution that has a license to provide intermediary services for a securities trading to the clients. Every retail client cannot by securities on stock exchange by himself be
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Credit Union
  A credit union is a financial intermediary institution controlled by its members, who brings deposits to the union and become a creditors of the institution. The principal services of the credit union are th
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Commercial Bank
  A commercial bank also commonly called just a bank is financial institution that has a license to provide financial services.    The principal services provided by banks: Taking the deposits
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financial Intermediary
  A financial intermediary is a financial institution that works in a financial market connecting money owners (savers) and credit seekers (borrowers). Of course, financial intermediaries are active not only i
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Life Insurance
  A life insurance is a service provided by insurance companies trying to bring more financial stability in to the lives of people.    Looking from investment point life insurance is two products c
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Private Banking
  Private banking is a service provided for the richest clients of the commercial bank. Such clients have designated personal banker from the institution and they can call to that personal banker for any financial
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Physical Asset Market
  A physical asset market is a market in which real products are traded. Physical asset market can also be called real asset market. Such real/tangible products traded in physical asset markets are gold, grain, mea
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Corporation
  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 &
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financial Asset Markets
  financial asset markets also called just financial markets. These are the markets, in which securities are traded.
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Money Market
  A money market is the market, in which money market investments are traded. Such money market investments can be deposits certificates, bills or other short term high grade fixed income securities.   
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Capital Markets
  Capital markets are the markets, in which stocks and medium to long term bonds are traded. Could be said that capital markets include stock markets and bond markets and are a part of financial markets.   C
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Mortgage Markets
  Mortgage markets are markets, in which credits, that include pledged real estate property, are created and traded. Usually in mortgage markets main players are financial institutions: retail banks sell such mortg
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Junk Bonds
  Junk bonds are bonds that have a speculative-grade credit rating, which is BB or lower.    Junk bonds are riskier but they have higher yields. The spread between junk bond yield and safe bond yield (c
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Enterprise Value
  Enterprise value (EV) is a financial measure that is used to reflect the magnitude of the business. If market capitalization shows only the value of shareholders equity, enterprise value includes both: equity val
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Investment Advisor
  An investment advisor is a person or a company that is registered with the Securities and Exchange Commission (SEC) and provides investment consultancies for remuneration. Investment advisor might provide consult
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Investment Consultant
  An investment consultant is a job position in financial companies. Main functions of investment consultant: Help private investors to make a proper investment strategy according to investors risk tolerance. A
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Cheap Stocks
  Cheap stocks are such stocks that are traded at low valuation multiples. For example, if you see a telecom or utility company of which P/E is equal to 6 and EV/EBITDA is equal to 3, you may say it is a cheap stoc
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Value Stocks
  Value stocks are opposite to growth stocks and attract investors not by growth perspectives but by stable cash and dividend flow. Market ratios (P/E, P/B and other) of value stocks are low and together with high
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Holding Company
  Holding company is a type of a company which main activity is to invest in other companies. Holding as itself does not do any activity instead of managing their subsidiary companies and searching for new investme
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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
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Operating Leverage
  An operating leverage is a company’s EBIT (earnings before taxes and financial operations) sensitivity to changes of sales. As the sensitivity is measured to operating income (close to EBIT), the
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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
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financial Leverage
  A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
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Direct Investments in Stocks
  Direct investments in stocks are investments made without financial intermediaries (only theoretically). It means an investor buys stock directly from the company without intermediation of stock exchange or broke
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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
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INVESTMENT MANAGEMENT – HOW TO MANAGE YOURS INVESTMENTS PROPERLY
  Investment management is a complete science and if you are expecting to become a professional investment manager in few hours you should get disappointed. However, there are several most important guidelines at i
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Investment Performance Measurement
  Many investors are happy about investment managers until the stock market is growing, but when the decline starts investment managers gets only the worst words about their job. However, this is wrong attitud
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Investment Risk Management
  There are several main methods of investment risk management:    Diversification. Diversification is the easiest and most of the times the cheapest way to reduce risk level of the investment portfol
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Quantitative Investment Management
  Quantitative investment management says, “Don’t worry about investment management, and let to do the job for the computer”.  It is a completely different approach compared to ‘value d
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Sharpe Ratio
  Sharpe ratio measures the above risk free performance of investment portfolio in relation to its risk. This ratio was developed by William F. Sharpe which introduced the ratio in 1966. Now Sharpe ratio is the mos
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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
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Foreign Direct Investment
  Foreign direct investment (FDI) traditionally was understood as investment that is made by foreign country in direct assets, for example factory, including land, building and machinery. When financial markets evo
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Return on Investment
  Return on investment (ROI) is a percentage that shows profitability of an investment or investment portfolio. Return on investment calculation:   CALCULATION:   Return on investment = net in
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Investment Finance
  Investment finance is finance that is related to investment. Investment market is a part of financial market, so we can say that investment is a part of finance.    Investment finance specializes on f
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Repo
  Repo (repurchase agreement) is a contract between the investor, who borrows money, and the lender who lends money and takes (buys and resells) securities for collateral, in case if the investor will default to re
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Hyperinflation
  Hyperinflation is an economical situation when inflation is extremely high. Regularly it is a result of inflation spiral and some disasters (as war), and is very dangerous for the economy. Just try imagine your b
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P/E Ratio
  P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im
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EV/S Ratio
Enterprise Value to Sales Ratio   EV/S ratio shows how expensive firm is compared to its sales. This multiple is important when company is unprofitable or profits margins are very low and turnaround is expected in
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EV/EBITDA Ratio
EBITDA Multiple   EV/EBITDA ratio shows how expensive firm is compared to its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). EV to EBITDA multiple is mostly used by professionals because
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Inventory Turnover Formula
  Inventory turnover formula helps to calculate inventory turnover ratio. There are few possible ways to calculate inventory turnover that are used in financial practice. You may see the formulas below:  
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Relative Valuation
Comparative analysis    Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi
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DCF Valuation
Discounted Cash Flow Analysis   DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t
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Replacement Cost Valuation
  Replacement cost valuation method is not very popular at stock valuation. Most of the investors are picking stocks with help of relative valuation or DCF valuation. Only when those two methods aren’t possib
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WACC
  WACC (Weighted Average Capital Cost) shows cost of capital when capital is consisted of both equity and debt capital. So WACC simply calculates the weighted average between equity cost and debt cost.  
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CAPM
  CAPM (Capital Asset Pricing Model) is method widely used for equity cost calculation. Equity cost should show the return that investor should expect/seek from an investment that contains specific level of risk.&n
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Hedge Funds
  Hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu
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Conflict of Interest
  A conflict of interest is very sensitive problem at financial intermediaries when interests of different groups (owners, investors, employees or other) cross each other. All employees in investment market should
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OIBDA
  OIBDA or also called operating income before depreciation and amortization is a financial measure used to represent specific type of an income. There are many types of income and each of those has some advantages
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Target Capital Structure
  Target capital structure is a mix of equity and debt capital that maximizes value of the shares. Target capital structure may be achieved when WACC (Weighted Average Capital Cost) is minimal. If proportion of equ
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Inventory Turnover Ratio
  Inventory turnover ratio shows how quickly company’s inventory is changing compared to its sales or cost of goods sold. This ratio shows how effectively inventory is managed in company’s production/di
http://www.investingforbeginners.eu/inventory_turnover_ratio

EBITDA Coverage Ratio
  EBITDA coverage ratio (also called EBITDA to Interest Coverage Ratio) shows company’s capability to deal with its financial leverage. If this ratio is too low, that may show company is in trouble and may ha
http://www.investingforbeginners.eu/ebitda_coverage_ratio

EBITDA Margin
  EBITDA margin is a profitability margin that shows how much of EBITDA earns company’s revenue relatively. The EBITDA margin is the best for profitability comparison of the companies if you want to measure e
http://www.investingforbeginners.eu/ebitda_margin

Profit Margin
  Profit margin normally refers to net profit margin, which is net profit divided by sales. But one should remember that profit might be of different kinds (net profit, pretax profit, EBIT, EBITDA and gross profit)
http://www.investingforbeginners.eu/profit_margin

ROE
  ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha
http://www.investingforbeginners.eu/roe

ROA
  ROA (Return on Assets) shows what profits are earned by company’s assets. Of course, assets alone usually do not earn the profit, because most of the times profit is the result of know-how and hard work of
http://www.investingforbeginners.eu/roa

Margin Call
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth?     Margin call is a fabulous term which carries some mysticism. However, there is nothing
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The Pros and Cons of Buying on Margin
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth?     The opportunity provided by buying on margin i
http://www.investingforbeginners.eu/the_pros_and_cons_of_buying_on_margin

Psychology of Buying on Margin: Is it worth?
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth?     For the conclusion I would like to say that bu
http://www.investingforbeginners.eu/psychology_of_buying_on_margin_is_it_worth

financial Investment
  financial investment is any financial asset that should provide a return for investor. financial asset is an asset that doesn’t have tangible form and has some financial obligations to its owner. All securi
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Trading Platform
  Trading platform is an electronic tool provided by brokerage company or other financial intermediary that allows for investor to buy and sell stocks or other securities using his computer. In other words trading
http://www.investingforbeginners.eu/trading_platform

M&A
  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
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Merger
  A merger is a deal when two (theoretically possible more) companies are merging in between to achieve synergy. Mergers are part of M&A market and differ from acquisition by payment method for the stake. In me
http://www.investingforbeginners.eu/merger

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
http://www.investingforbeginners.eu/hostile_takeover

White Knight
  A white knight is a friendly (for the target) bidder who gives a better offer to acquire stake in the company than “hostile” bidder during hostile takeover. White knight is one of the strategies used
http://www.investingforbeginners.eu/white_knight

Underwriter
  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
http://www.investingforbeginners.eu/underwriter

Leveraged Buyout
  A leveraged buyout (LBO) is a takeover of a company when debt capital is the main financing source for the acquisition and the acquired assets are used as collateral to receive the needed debt. The LBO may be exe
http://www.investingforbeginners.eu/leveraged_buyout

Risk Tolerance
  Risk tolerance is a characteristic that describes the investor and his ability to withstand losses from investments. The higher risk tolerance of investor the more losses he/she may handle.    Investm
http://www.investingforbeginners.eu/risk_tolerance

Stock Option
  A stock option is derivative financial instrument that gives the holder of the option the right to buy some particular stock at the predetermined strike price till the end of the option (or at the end, depending
http://www.investingforbeginners.eu/stock_option

financial Assets
  There are two main investment (asset) classes: financial assets and non-financial (tangible) assets. Both of them may have similar characteristics as yielding or increasing in value over long period; but financia
http://www.investingforbeginners.eu/financial_assets

Index Options
  Index options are derivative financial instruments that provide for the buyer of the option the right (possibility) to make profits from index value changes. It may be a good investing instrument for the investor
http://www.investingforbeginners.eu/index_options

High Return Investments
  High-return investments (or high-yield investments) are investments that can provide the higher return than average investments, and of course such investments are riskier. The reality is that people have differe
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Stock Trader
  A stock trader is a speculator that is trying to make profits from quick changes in value of stocks or other securities that he trades. Stock trader have few differences from normal investor and the main differen
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Investment Services
  Investment services is a spectrum of financial services provided by investment banks, brokerage houses, investment management companies and other financial intermediaries that work in investment finance segment.
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Best Investments
  Best investments are always wanted, but the reality is that there are no best investments for everyone. And if such investment would exist then those investments would become an investment bubble and would not st
http://www.investingforbeginners.eu/best_investments

Investment Information
  Investment information is crucial to make good investment decisions. It is information that may help to make good investment solution and would help to reach for better investment results.    The deta
http://www.investingforbeginners.eu/investment_information

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
http://www.investingforbeginners.eu/personal_investing

Valuation Consultants
  Valuation consultants are professionals that know everything about the value of an asset or business. The real market value consists of many parts and all of them may have critical importance to the value. Only e
http://www.investingforbeginners.eu/valuation_consultants

Company Valuation
  Company valuation is the same as business valuation. The only difference between company valuation and business valuation may occur if value of company’s stocks has to be determined instead of the whole bus
http://www.investingforbeginners.eu/company_valuation

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
http://www.investingforbeginners.eu/small_business_valuation

Finance Advisor
  A finance advisor is a job title for a person who provides financial consultations for the clients. financial advisor also includes functions of an investment advisor but may include more financial advisory funct
http://www.investingforbeginners.eu/finance_advisor

Stock Price
  A stock price is the last price of a share (stock) that was traded in a stock exchange for a particular stock. If stock exchange is closed at the moment, then the last stock price will be closing price for that s
http://www.investingforbeginners.eu/stock_price

Buying Stocks
  Buying stocks is an easy thing. Of course, it is harder to pick good stocks. Every person, that has some capital, can open a trading platform and buy stocks, but the goal is not only to buy the stocks but to make
http://www.investingforbeginners.eu/buying_stocks

Stock Symbol
  Stock symbol is symbol that is created for stocks by stock exchange to be easier recognizable for participants of the financial market. Stock symbol mostly is called as stock ticker.
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Stock Ticker
  A stock ticker also called as a stock symbol actually is some code that is given for a p stock. Every stock that is listed on any stock exchange has some stock ticker by which is recognized. The stock ticker is n
http://www.investingforbeginners.eu/stock_ticker

Liquidity
  (1) Market liquidity is a characteristic of a security or other traded investment that shows how easy it is convertible in to cash at a market value. Usually when investor decides to sell some investment and
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Broker
  A broker is an intermediary that helps for retail or other investors buy their investments. Broker can be as a person (job title) or a brokerage company that acts as a financial intermediary between the seller an
http://www.investingforbeginners.eu/broker

Investment Management Salaries
  The media always pay a lot of attention to investment management salaries and maybe those salaries are worth it. Investment management business as investment management consulting or investment fund management re
http://www.investingforbeginners.eu/investment_management_salaries

Investment Management Business
  Investment management business is a large part of a financial industry and is very important for investment banks and other investment companies because investment management business has quite good profitability
http://www.investingforbeginners.eu/investment_management_business

Investment Management Process
  Investment management process has several functions: Macroeconomics analysis and estimates Research of industry sectors Security picking Asset allocation Market timing financial news covering Securitie
http://www.investingforbeginners.eu/investment_management_process

Small Business Investors
  Small business investors are private investors or business investors that are investing in to small businesses. Small businesses are also in need for capital and the best source for that capital might a bank beca
http://www.investingforbeginners.eu/small_business_investors

financial Statements
  financial statements are periodically by the companies issued reports that provide the most important financial information about company’s financial condition and success of activity.    There
http://www.investingforbeginners.eu/financial_statements

Income Statement
  Income statement (also called statement of operations, profit and loss statement, P&L or other) is one of three main financial statements reported by the companies periodically. Income statement exposes compa
http://www.investingforbeginners.eu/income_statement

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
http://www.investingforbeginners.eu/balance_sheet

Cash Flow Statement
  Cash flow statement is one of the three main financial statements (others are income statement and balance sheet). If income statement exposes income that was received according accounting standards, cash flow st
http://www.investingforbeginners.eu/cash_flow_statement

Earnings
  Earnings are calculated gains of the company and should represent the profit of that business. There are several types of earnings:   Retained earnings are equal to net profit less dividends. Net earnin
http://www.investingforbeginners.eu/earnings

Profit
  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
http://www.investingforbeginners.eu/profit

Income
  The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu
http://www.investingforbeginners.eu/income

Net Income
  Net income (net profit) is a financial indicator of the company that shows the real profitability of the business in accordance to its capital structure. Net income is equal to all revenue and gains less all expe
http://www.investingforbeginners.eu/net_income

Loss
  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
http://www.investingforbeginners.eu/loss

Gross Margin
  Gross margin is profitability percentage that shows the ratio between gross income and revenue. Gross margin is usually calculated when there is a need to compare company’s competiveness and effectiveness i
http://www.investingforbeginners.eu/gross_margin

Operating Income
  Operating income (operating profit) is the type of company’s profit that comes from operating activity. That means operating profit is lower than gross income by operating expenses but higher than pre-tax p
http://www.investingforbeginners.eu/operating_income

Operating Margin
  Operating margin is a profitability percentage that shows what company’s profit margin is before it pays interests and taxes. Operating margin simply ignores capital structure (because ignores financial act
http://www.investingforbeginners.eu/operating_margin

EBIT
  EBIT (also called Earnings Before Interest and Taxes) is a financial indicator of the company that provides information about company’s profitability while ignoring the impact of capital structure and corpo
http://www.investingforbeginners.eu/ebit

financial Analysis
  financial analysis is an important part of investing, especially if investor wants better results from his investments. Of course it is possible to ignore financial analysis and make investment decisions based on
http://www.investingforbeginners.eu/financial_analysis

Profitability Analysis
  The main purpose of profitability analysis is to determine the profit margin and compare it to the appropriate financial data. Profitability should not be confused with return because profitability is based on so
http://www.investingforbeginners.eu/profitability_analysis

Return
  Return analysis is different from profitability analysis because usually return is measured as a profitability of the assets, investments, capital or other similar asset group but not as a profitability of the re
http://www.investingforbeginners.eu/return

Debt Coverage Ratio
  Debt coverage ratio (debt service coverage ratio) is a ratio that measures solvency risk and mostly is applied for property projects. There are many debt coverage ratios that are used in financial practice on thi
http://www.investingforbeginners.eu/debt_coverage_ratio

Solvency
  Solvency analysis takes an important part in financial analysis and mostly is used by creditors. Creditors of the business (bondholders, banks that provide loans) don’t care much if company’s profit w
http://www.investingforbeginners.eu/solvency

Debt to Equity
  Debt to equity ratio (also known as D/E ratio, Debt/Equity) measures how big is company’s debt compared to its book capital (equity). The higher is the debt to equity ratio the higher is the insolvency risk
http://www.investingforbeginners.eu/debt_to_equity

Debt to Asset Ratio
  Debt to asset ratio (also called as D/A ratio, Debt/Asset) measures how big is company’s debt compared to its assets. Debt to asset ratio is very similar to debt to equity (D/E) ratio but normally is lower
http://www.investingforbeginners.eu/debt_to_asset_ratio

Debt to EBITDA
  Debt to EBITDA (also known as D/EBITDA or Debt/EBITDA) is widely used ratio that measures how big company’s debt is compared to its EBITDA (earnings before interest taxes depreciation and amortization). EBI
http://www.investingforbeginners.eu/debt_to_ebitda

financial Planning
  financial planning is a type of financial analysis of which goal is to predict financial situation of the object in the future. There are two main trends where financial planning can be applied: in corporate fina
http://www.investingforbeginners.eu/financial_planning

Turnover Ratio
  (1) Turnover ratio of mutual fund shows how quickly assets of the fund are changing. Actively managed investment funds have higher turnover ratio than passively managed funds, and normally turnover ratio is measu
http://www.investingforbeginners.eu/turnover_ratio

Cash Debt Coverage Ratio
  ‘Cash debt coverage ratio’ (also known as ‘current cash debt coverage ratio’) measures company’s ability to repay its debts. Basically, it compares cash flow that is received from op
http://www.investingforbeginners.eu/cash_debt_coverage_ratio

Cash Coverage Ratio
  Cash coverage ratio measures company’s ability to repay its debts. It compares EBITDA (type of earnings) of the company and interest that is paid for company’s debts annually. EBITDA is not exactly eq
http://www.investingforbeginners.eu/cash_coverage_ratio

financial Forecasting
  financial forecasting is a part of financial planning and also a part of a DCF valuation. But usually financial planning covers only a period of year or two while financial forecasting regularly covers about five
http://www.investingforbeginners.eu/financial_forecasting

financial Planning Process
  financial planning process requires the most professionalism and attention to the every detail. While financial planning estimates main financial indicators or financial statements, the process of it includes als
http://www.investingforbeginners.eu/financial_planning_process

Strategic financial Planning
  Strategic financial planning is a bit different from standard financial planning because standard financial planning focuses on a budget which is detailed estimation of financial statements when strategic financi
http://www.investingforbeginners.eu/strategic_financial_planning

Working Capital Management
  Why Working Capital Is Important? Working capital is one of the main parts of company’s finances and every manager, even of the small company, manages working capital despite the fact he knows about that o
http://www.investingforbeginners.eu/working_capital_management

Working Capital Calculation
  There are few modifications of working capital calculation. All data that are needed for working capital calculation can be found in balance sheet (which is one the three main financial statements).   
http://www.investingforbeginners.eu/working_capital_calculation

Investments in Blue Chip Stocks
  Stock investments require high degree of financial knowledge and the understanding of market realities, but only if you are seeking for the most efficient result. Yet, the reality is that there are millions of pe
http://www.investingforbeginners.eu/investments_in_blue_chip_stocks

Investments in Small Cap Stocks
  Investments in Small Cap Stocks Investments in small cap stocks could be compared to penny stock investments but the term ‘penny stocks’ is not specific enough. The thing is that the determination of
http://www.investingforbeginners.eu/investments_in_small_cap_stocks

Stocks and Commodities
  You may ask how stocks and commodities related are. And the answer is simple: everything is related and especially in financial markets. Normally, if some of the main asset class (as stocks) looses or gains
http://www.investingforbeginners.eu/stocks_and_commodities

Earnings Estimate
  Earnings estimate is a forecast for income of the closest future period. Earnings estimate usually is calculated by the employees of analyzed company or analysts of other financial companies. Normally, earnings e
http://www.investingforbeginners.eu/earnings_estimate

Pro Forma
  Pro forma is a type of financial statement that reflects financial information under some conditional basis. For example, if company has discontinued some activity, it may provide normal income statement and pro
http://www.investingforbeginners.eu/pro_forma

Cost of Debt
  Cost of debt shows what the capital cost of the company for its debt capital is. Basically company’s capital consists of two parts: debt capital and equity capital. (A mixed capital like mezzanine financing
http://www.investingforbeginners.eu/cost_of_debt

Opex
  Opex (operating expense) are expenses of the business and are related to the operational activity of the company.  Basically, every company has few types of expenses: COGS (cost of sales) include costs t
http://www.investingforbeginners.eu/opex

Cost of Debt Calculation
  The cost of debt is easy to calculate if they are required data. Actually, there are few methods to get the cost of debt, but some of those are more accurate some less. If you want that your result would be more
http://www.investingforbeginners.eu/cost_of_debt_calculation

Price to Free Cash Flow
  Price to free cash flow (P/FCF) or EV/FCF ratio are ratios that compare company's price to its free cash flow. The main difference between those two ratios is that EV/FCF also includes the eff
http://www.investingforbeginners.eu/price_to_free_cash_flow

Price to Cash Flow Ratio
  Price to cash flow ratio (P/CF) and EV/CF ratio are similar but there are some differences. The main difference is that EV/CF also includes the effect of company’s financial debt which says a different
http://www.investingforbeginners.eu/price_to_cash_flow_ratio

Free Cash Flow Yield
  Free cash flow yield (FCF yield) show how much of cash that may be distributed to shareholders the business earns compared to its price on the stock exchange (including both: equity value and debt value or just e
http://www.investingforbeginners.eu/free_cash_flow_yield

Capex
  Capex (capital expenditure) is company’s investment in long-term assets that are needed to continue the business or for future’s growth. The perfect examples of capital expenditure can be an acquisiti
http://www.investingforbeginners.eu/capex

Operating Cash Flow
  Operating cash flow or ‘cash flow from operations’ (CFFO) is one of the most important among financial indicators and is used to measure company’s results in cash terms. While net income or oper
http://www.investingforbeginners.eu/operating_cash_flow

EBITA
  EBITA (earnings before interest, taxes and amortization) is a financial indicator that shows company’s earnings which are equal to pretax profit plus corporate tax and amortization.    EBITA is
http://www.investingforbeginners.eu/ebita

Cash Investments
  Cash investments are the safest investments over short-term period. Such investments include saving accounts, certificates of deposit, money market instruments (treasury bills, money market funds). The main crite
http://www.investingforbeginners.eu/cash_investments

Sector
  Sector is a segment of an economy that distinguishes oneself by some characteristics that belongs to that segment. There are a lot of different classifications used in practice to classify different business segm
http://www.investingforbeginners.eu/sector

Economic Cycle
  What is economical cycle? An economic cycle means the repeated changes of the economical trends. While during very long economical period economy always has up-trend because of technological evolution and increa
http://www.investingforbeginners.eu/economic_cycle

Cost of Capital
  Capital of every company consists of two parts: equity capital and debt capital (only if company has no financial debts it has only equity capital). Both these capital sources have their costs and this is cost of
http://www.investingforbeginners.eu/cost_of_capital

Beta
  What is beta? Beta is a ratio that measures volatility of an investment in relation to the whole market. In other words, it shows how the price of stock was changing compared to the whole market. Theoretically,
http://www.investingforbeginners.eu/beta

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
http://www.investingforbeginners.eu/annual_report

Intangible Assets
  All assets can be classified to three main groups: tangible assets, financial assets and intangible assets. Intangible assets are those assets that aren’t financial and don’t have a real physical form
http://www.investingforbeginners.eu/intangible_assets

Tangible Assets
  Basically all assets can be divided in tangible assets or non-tangible assets (intangible and financial). Tangible assets are those assets that exist physically and the value of them depends on their physical con
http://www.investingforbeginners.eu/tangible_assets

NOPAT
  NOPAT (‘net operating profit after tax’ or ‘after tax operating profit’) is equal to operating profit less taxes. It is adjusted by tax rate because the part cost of debt which is part of
http://www.investingforbeginners.eu/nopat

Return on Invested Capital
  Return on invested capital (ROIC) or also called return on capital is a financial ratio employed to measure nominal company’s return that is earned by capital invested in operating asset. Basically return o
http://www.investingforbeginners.eu/return_on_invested_capital

financial Ratios
  financial ratios are ratios that are used in financial analysis or in other words that are using financial data of a company. Such financial data usually is found in financial statements (income statement, balanc
http://www.investingforbeginners.eu/financial_ratios

Accounts Payable Turnover
  Accounts payable turnover ratio shows how quickly company is paying to its suppliers for services or goods and materials. If payables turnover is very low, it may signify different reasons behind it: Company i
http://www.investingforbeginners.eu/accounts_payable_turnover

Fixed Asset Turnover
  Fixed asset turnover ratio is a financial ratio that measures how much of sales are created by company’s property, plant and equipment. The ‘higher asset turnover’ is the better, because it mean
http://www.investingforbeginners.eu/fixed_asset_turnover

Fundamental Analysis
  Fundamental analysis is the type of financial analysis that relies on company’s fundamentals. Those fundamentals depend on the target of the analysis. For example, fundamental analysis of stock depends on i
http://www.investingforbeginners.eu/fundamental_analysis

Technical Analysis of Stocks
  Technical analysis of stocks is widely known type of stock analysis. Technical analysis is completely opposite to fundamental analysis. While fundamental analysis relies on company’s ability to generate cas
http://www.investingforbeginners.eu/technical_analysis_of_stocks

Coverage Ratios
  Coverage ratios are financial ratios that measure the ability of the company to repay its financial liabilities. Such ratios compare company’s operating income (or other type of income) or operating cash fl
http://www.investingforbeginners.eu/coverage_ratios

Receivables Turnover
  Receivables turnover ratio (also called as accounts receivable turnover) is a financial ratio that measures how efficiently company collects its receivables. If receivables turnover is very low, it means company
http://www.investingforbeginners.eu/receivables_turnover

Average Collection Period
  Average collection period is a financial ratio that is used to measure how fast company collects its receivables. ‘Average collection period’ shows what is the average time period till company gets ca
http://www.investingforbeginners.eu/average_collection_period

Quick Ratio
  Quick ratio (also called ‘acid test ratio’) is a financial ratio that measures company’s financial liquidity. This ratio compares company’s most liquid assets and short-term liabilities. I
http://www.investingforbeginners.eu/quick_ratio

Capital Employed
  Capital employed is a value of capital investments in a company. Basically, the capital of each company can be classified in these types of capital: Equity capital  Debt capital Working capital  
http://www.investingforbeginners.eu/capital_employed

Current Ratio
  Current ratio is a financial ratio that measures company’s financial liquidity in short term. In simple words, this ratio compares company’s short-term assets to its short term liabilities. If short-t
http://www.investingforbeginners.eu/current_ratio

Cash Ratio
  Cash ratio is a financial ratio that measures company’s financial liquidity over short term. It compares company’s cash reserves to short-term liabilities. If ‘cash ratio’ is high, it may
http://www.investingforbeginners.eu/cash_ratio

Equity Ratio
  Equity ratio is a financial ratio that compares company’s equity to assets. Basically, it shows what part equity capital makes in total capital of a company. If ‘equity ratio’ is very high (clos
http://www.investingforbeginners.eu/equity_ratio

Return on Capital Employed
  Return on capital employed ratio (ROCE) measures company’s return compared to its employed capital. Return in this case is some kind of profit (mostly EBIT or NOPAT) and the capital employed means equity ca
http://www.investingforbeginners.eu/return_on_capital_employed

Capital Adequacy Ratio
  Capital adequacy ratio is the main financial ratio for banks to measure whether the bank has enough of capital on which depends the riskiness of the bank. Banks are borrowing money from other depositors and it is
http://www.investingforbeginners.eu/capital_adequacy_ratio

Net Interest Income
  Net interest income is an indicator that measures lending business performance of a financial institution. Basically, it is equal to interest income from loans and other assets less interest expenses for deposits
http://www.investingforbeginners.eu/net_interest_income

Interest Rate Spread
  ‘Interest rate spread’ is a very important measure for banks and other financial institutions. As money lending is the core business for most of the banks, it is very important that this operational s
http://www.investingforbeginners.eu/interest_rate_spread

Net Interest Margin
Net interest margin shows the profitability of the lending business for a bank or other financial institution. Lending business is the core business for most of the banks, and the profitability of this operational segmen
http://www.investingforbeginners.eu/net_interest_margin

Cost/Income Ratio
  Cost/income ratio is very popular financial ratio in bank analysis. This ratio measures the relation of bank’s operating costs to operating income. Basically, lower ratio is better because means higher prof
http://www.investingforbeginners.eu/cost_income_ratio

Non-Performing Loan Ratio
  Non-performing loan ratio measures the quality of the loan portfolio of the financial institution. This financial ratio compares non-performing loans to the total loan portfolio (loans are assets for the bank), a
http://www.investingforbeginners.eu/nonperforming_loan_ratio

Loan to Deposit Ratio
Loan to deposit ratio is financial ratio used for banks or other financial institutions. This ratio compares bank’s loan portfolio to deposit portfolio and measures financial liquidity of the institution.  &n
http://www.investingforbeginners.eu/loan_to_deposit_ratio

Loans to Assets Ratio
  ‘Loans to assets ratio’ is a financial ratio that usually is applied for banks (or credit unions) to measure the relation of the bank’s loan portfolio to the total assets.   Providing loa
http://www.investingforbeginners.eu/loans_to_assets_ratio

Reserve Ratio
  Reserve ratio (reserve requirement or cash reserve ratio) is a ratio that is used by central bank of an area to regulate the financial market. This financial ratio compares the cash of the bank to the deposits th
http://www.investingforbeginners.eu/reserve_ratio

Cash Turnover Ratio
  Cash turnover ratio compares company’s sales to its cash and measures how effectively company is using cash assets. However, this financial ratio now is a bit outworn and is not very meaningful for most of
http://www.investingforbeginners.eu/cash_turnover_ratio

Liquidity Ratio
  Liquidity ratio is a ratio that measures company’s liquidity. At first, it is needed to mention that liquidity may have two meanings: financial liquidity of a company or market liquidity of some asset. Liqu
http://www.investingforbeginners.eu/liquidity_ratio

Asset to Equity Ratio
  Asset to equity ratio compares company’s assets to the book value and measures the riskiness of the company. This ratio cannot be lower than 1.0, and if it is equal to 1, it means that assets are equal to e
http://www.investingforbeginners.eu/asset_to_equity_ratio

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
http://www.investingforbeginners.eu/total_debt_ratio

Total Debt
  Definition   The understanding of the total debt may be different depending on the experience of the user. Traditionally, ‘total debt’ includes financial liabilities of the company, although ot
http://www.investingforbeginners.eu/total_debt

Gross Debt
  (1) Gross debt in corporate finance is often used as synonym for ‘total debt’, however there might be some differences depending on the version of the total debt. Technically, ‘gross debt’
http://www.investingforbeginners.eu/gross_debt

Non-Operating Assets
  Non-operating assets are assets of the company that aren’t used in the main activity of the company. Such assets can be either financial or non-financial. This asset type is very important during the valuat
http://www.investingforbeginners.eu/nonoperating_assets

Book Value
  There are two main types of values that are used in finance: Book value  Market value   Book value is a value that is recorded in the balance sheet of a company. Every asset of the company must
http://www.investingforbeginners.eu/book_value

Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.  
http://www.investingforbeginners.eu/leverage

Front-End Load
  Front-end load (sales fee) was a very popular load fee in investment market for decades. This fee is paid by investors during the acquisition of mutual fund units and is some percentage (0%-5%) on the invested am
http://www.investingforbeginners.eu/frontend_load

About Us
  The website INVESTING FOR BEGINNERS EU was created in order to educate investors and other participants of the financial markets in accordance to the highest standards.    Investment process is not re
http://www.investingforbeginners.eu/about_us

Internal Rate of Return
  An internal rate of return (IRR) is a ratio used very often to measure a profitability of some investment project. IRR is determined as a discount rate when NPV of the project is equal to zero. If IRR is higher t
http://www.investingforbeginners.eu/internal_rate_of_return

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
http://www.investingforbeginners.eu/privately_held_corporation


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