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Glossary of Stock Investing Terms: Q-R




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This article is from the Glossary of Stock Investing Terms.

Glossary of Stock Investing Terms: Q-R

  • Quick ratio:

    Calculated by subtracting inventories from current assets, then dividing by current liabilities. The Quick Ratio is an indicator of a company's financial strength. Also known as the Acid Test.

  • Quotation:

    Or Quote. The current price being offered for a particular stock.

  • Range:

    The difference between the high and low price of a security during a partciular period.

  • Real estate investment trust:

    Or REIT. REITs sell like stocks on the major exchanges, and invest in real estate either directly through properties or mortgages. REITs receive special tax considerations, and typically offer investors high yields as well as a highly liquid method of investing in real estate.

  • Recession:

    A period of general economic decline, part of the usual business cycle.

  • Record date:

    The date by which a shareholder must officially own shares in order to be receive a declared dividend.

  • Reinvestment:

    With stocks, using dividends to purchase additional shares instead of receiving payments in cash.

  • Relative strength:

    Calculated by dividing the performance of a stock's price over a period by a market index. Used to determine a stock's performance relative to the market and other stocks.

  • Retained earnings:

    Also known as the Retention Ratio. The percentage of earnings not paid out in dividends but retained by the company to be reinvested in its core business or to pay debt.

  • Return:

    The percentage gain or loss for a security in a particular period. The Real Rate of Return is the annual return realized on that investment, adjusted for changes in the price due to inflation.

  • Return on assets:

    Abbreviated ROA. Calculated by dividing a company's annual earnings by its total assets, displayed as a percentage. Useful to indicate how profitable a company is relative to its total assets.

  • Return on equity:

    Abbreviated ROE. Calculated by dividing a company's annual income by its Book Value (or its earnings per share by book value per share), displayed as a percentage. A measure of a company's profitability.

  • Reverse stock split:

    A reduction in a company's outstanding shares. After the split, the market value of the shares remains the same, though the number of shares held is proportionately decreased. A company typically uses a reverse split to boost its stock price, and is not usually a positive indicator.

  • Right:

    A special security issued by a company in a Rights Offering (typically good for only a short period) that gives a stockholder the right to purchase new shares issued by the corporation at a preset price, usually below the market price.

  • Round lot:

    Typically 100 shares of a security, the basic unit of trading.

 

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