Glossary A to F

Ad hoc bulletins: definition:The Securities Trading Act imposes on issuers a duty to issue ad hoc bulletins, i.e. immediate announcements of important corporate news capable of materially influencing the stock price.
The Securities Trading Act imposes on issuers a duty to issue ad hoc bulletins, i.e. immediate announcements of important corporate news capable of materially influencing the stock price. This aims to prevent insiders from making use of any information with a bearing on the company’s stock price known only to them. The news must be reported to the German Federal Regulatory Office for Securities Trading and Stock Exchange Activities, which then makes a decision on whether it is necessary to suspend trading in the stock.
AG: acronym of:Aktiengesellschaft
Premium: definition:
The amount by which the proceeds from the issue of new securities exceed their nominal amount.
Share: definition:This term refers to both membership rights (share in a listed company) and the security embodying such rights.
This term refers to both membership rights (share in a listed company) and the security embodying such rights. The holder of a share has a share in the company’s assets. His rights are protected by the provisions of the German Stock Corporation Act.
Share analysis: definition:Experts analyze shares, listed companies and stock markets to assist investors with their investment decisions.
Experts analyze shares, listed companies and stock markets to assist investors with their investment decisions. Stock analyses provide information on the company and also include forecasts of its future performance.
Stock corporation: definition:Company whose share capital is divided into individual shares.
Company whose share capital is divided into individual shares. The shareholder’s liability is confined to the size of his shares. In other words, in contrast to partnerships, shareholders do not have unlimited liability.
Share Index: definition:Share indices track the price of several shares. For this purpose, the shares included in the index are weighted in accordance with certain criteria.
Share indices track the price of several shares. For this purpose, the shares included in the index are weighted in accordance with certain criteria. Equity indices (e.g. FAZ-Aktienindex) only track the prices of shares. Performance indices (e.g. DAX) additionally include dividends and subscription rights in the event of equity issues. Performance indices thus track the total value of the shares included in the index.
Stock option plans: definition:Companies use stock option plans to provide employees and, more particularly, executives with remuneration based on the company’s share price in lieu of other types of bonuses.
Companies use stock option plans to provide employees and, more particularly, executives with remuneration based on the company’s share price in lieu of other types of bonuses. This particularly aims at encouraging an orientation to shareholder value in management decisions.
Share performance: definition:
Changes in the price of the share over time.
Stock buyback: definition:A procedure in which a listed company buys back its own shares as a means of releasing capital back to its shareholders.
A procedure in which a listed company buys back its own shares as a means of releasing capital back to its shareholders. The company is not permitted to exercise any rights (voting rights, dividend claims, subscription rights etc.) on the basis of these shares.
Share register: definition:Listed companies which issue registered shares are required to maintain a share register.
Listed companies which issue registered shares are required to maintain a share register. This records the name, date of birth and address of each shareholder. In this way, it is possible to determine the current shareholder structure and any changes to it. Shareholders are entitled to obtain information on their own entry in the share register.
Official trading: definition:Official trading is a segment of the German stock exchanges.
Official trading is a segment of the German stock exchanges. This segment makes the greatest demands of listed companies. When a company seeks admission to official trading, it must issue a detailed prospectus containing precise information. In addition, it must publish interim reports and annual financial statements in an official publication. The price of the company’s shares are determined by official brokers. Traders are entitled to have their orders executed at the price fixed. Most transactions are executed in this market.
Equity-to-asset ratio: definition:
The ratio of assets to non-current capital (equity capital + liabilities due in more than one year).
Bond: definition:A bond is a fixed-income security, embodying creditor rights.
A bond is a fixed-income security, embodying creditor rights. They mostly guarantee payment at a fixed interest rate and repayment of a certain amount.
Supervisory board: definition:In Germany, the supervisory board is one of a listed company’s three corporate bodies, the other two being the annual general meeting and the management board.
In Germany, the supervisory board is one of a listed company’s three corporate bodies, the other two being the annual general meeting and the management board. The supervisory board appoints the members of the management board and monitors and advises them in the performance of their management duties.
Stock exchange: definition:The stock exchange is the market for securities. In Germany, securities trading takes place at certain places and times.
The stock exchange is the market for securities. In Germany, securities trading takes place at certain places and times. The German stock exchanges are subject to government supervision. The management board of the stock exchange decides on the admission of persons to trading. An admission office monitored by the state supervises the admission of securities to trading. The German stock exchanges comprise various trading or market segments, e.g. official trading, the regulated market, OTC trading and the “Neuer Markt”.
BaFin: acronym of:This is the German acronym for the German Federal Supervisory Authority for Financial Services.
This is the German acronym for the German Federal Supervisory Authority for Financial Services. It combines the duties previously performed by the German Federal Supervisory Authorities for Banking, Insurance and Securities Trading. Among other things, BaFin is responsible for monitoring the proper execution of securities trading. In particular, it is responsible for preventing illegal insider trading.
Bear market: definition:Sharp, mostly protracted decline in stock prices.
Opposite: Bull market.
German Federal Supervisory Office for Securities Trading: definition:Among other things, this office is responsible for monitoring the proper execution of securities trading. In particular, it is responsible for preventing illegal insider trading.
Contingent capital: definition:Amount prescribed in the company’s articles of incorporation which is available for equity issues if approved by the shareholders, e.g. for the issue of convertible and/or option bonds.
Employee shares: definition:Numerous listed companies offer their staff the possibility of buying shares in their own company.
Numerous listed companies offer their staff the possibility of buying shares in their own company. Generally speaking, they are sold at a lower price than on the market. Employee shares offer the same rights as other shares but are tax-privileged under certain circumstances. The tax advantages can only be claimed if the shares are held for six years. In other words, if they are sold any earlier, the tax advantages must be relinquished.
Bonus shares: definition:Bonus shares are issued when a listed company converts unallocated reserves into share capital.
Bonus shares are issued when a listed company converts unallocated reserves into share capital. As the company’s equity capital is not changed as a result, the shareholders’ relative shares are not altered, although a larger number of shares is outstanding.
Subscription right: definition:The shareholder’s right to subscribe to new shares when his company executes an equity issue.
The shareholder’s right to subscribe to new shares when his company executes an equity issue. The shareholders may waive the exercise of their subscription rights and sell them on the market.
Balance sheet: definition:Comparison of the company’s assets and liabilities at the end of the fiscal year, the difference being its net assets.
Part of the financial statements.
Bonus: definition:Special remuneration paid to the shareholders in addition to the dividend, e.g. on the occasion of company anniversaries, special income.
German Federal Supervisory Office for Securities Trading: definition:Among other things, this office is responsible for monitoring the proper execution of securities trading. In particular, it is responsible for preventing illegal insider trading.
Cash earnings in accordance with DVFA/SG: definition:Formerly DVFA/SG cash flow.
Formerly DVFA/SG cash flow. Net financial inflow from operating activities. Expresses the company’s inherent ability to finance itself by measuring the amount available to the company for capital spending, repaying debt, paying dividends and maintaining its cash flow.
Cash flow per share (CFPS): definition:Cash flow per share is calculated as follows: Cash flow divided by the number of shares outstanding.
Cash flow per share is calculated as follows: Cash flow divided by the number of shares outstanding. Cash flow per share is used as a basis for calculating the price/cash flow ratio.
CFPS: acronym of:Cash Flow per share
CFROI: acronym of:Cash Flow Return on Investment
Cash Flow Return on Investment: Total return on capital used to measure the value of investments.
Chart analysis: definition:This is a method of analysing changes in the price of a share or group of shares.
This is a method of analysing changes in the price of a share or group of shares. For this purpose, they are plotted on a chart to identify certain formations or trends.
Consensus Rating: definition:The average of analyst recommendations for a certain share.
The average of analyst recommendations for a certain share. As many brokers use different categories for assessing a share (rating systems), their recommendations must be standardised to calculate the consensus. This standard comprises the following categories to which a number is assigned:
1. Strong Buy
2. Buy
3. Hold
4. Underperform
5. Sell
Each analyst recommendation is assigned to one of these categories, allowing a mean to be calculated. This produces the consensus rating.
Corporate Governance: definition:Corporate governance refers to the rules of good and value-oriented management.
Corporate governance refers to the rules of good and value-oriented management. The aim is to monitor the company’s management and to create mechanisms for encouraging executives to at in the shareholders’ interests.
Brokerage: definition:Fee paid to the broker for arranging a securities transaction.
Coverage: definition:This refers to the analysis of listed companies by banks and financial analysts in the form of studies and analyses.
DAX: acronym of:The German blue-chip share index DAX tracks the performance of the 30 most important German shares.
The German blue-chip share index DAX tracks the performance of the 30 most important German shares. In addition to prices, it also includes dividend payments. The DAX started at the end of 1987 with a value of 1,000.
Custodian account: definition:An account held with a bank for the management of securities.
An account held with a bank for the management of securities. Securities can be held separately for each customer in a jacket custodian account or, with the customer’s approval, in a collective custodian account. The latter is the normal and less expensive form. In either case, customer custodian accounts are held separately from the bank’s own holdings and cannot be accessed by the bank’s creditors.
Designated Sponsor: definition:The designated sponsor is responsible for generating additional liquidity for the stock by providing binding buying and selling prices on request.
Dividend: definition:Each shareholder is entitled to a share in his company’s distributed profit depending on the size of his shares. This part of the profit is known as the "dividend".
DRS: acronym of:German Accounting Standard issued by Deutsches Rechnungslegungs Standards Committee e.V.
DVFA earnings: acronym of:DVFA is short for “Deutsche Vereinigung für Finanzanalyse und Asset Management”.
DVFA is short for “Deutsche Vereinigung für Finanzanalyse und Asset Management”. DVFA earnings are calculated from the generally accepted DVFA guidelines for preparing financial statements. Generally speaking, it differs from the results calculated in accordance with German commercial law as it is adjusted for all exceptionals. This provides a more objective and comparable idea of the company’s profit earning capacities.
Earnings per Share: definition:
EBIT: acronym of:Earnings before Interest and Tax
EBITD: acronym of:Earnings before interest, tax and depreciations.
EBITDA: acronym of:Earnings before interest, taxes, depreciation and amortization.
Shareholders' equity: definition:In contrast to debt capital, these are the funds which are provided by the shareholders to finance a company or the earnings retained by the company.
Return on capital: definition:Ratio of earnings (net of minority interests) to equity capital.
Ratio of earnings (net of minority interests) to equity capital. This ratio reflects the company’s profitability and is comparable to the interest on a cash investment.
Issue: definition:Issue of securities by means of a public offer, generally arranged by a group of banks (issuing syndicate).
Issuer: definition:Issuers are generally companies or government bodies issuing securities.
EPRA: acronym of:European Public Real Estate Association
European Public Real Estate Association: With headquarters in Amsterdam, EPRA is an organisation representing the interests of the large European real estate companies in the public and supporting the development and market presence of the listed European real estate companies. The internationally renowned EPRA index tracks the performance of the largest listed real estate companies in Europe and North America.
EPS: acronym of:Earnings per Share
DVFA/SG earnings: definition:Net earnings adjusted for exceptionals. Provides a basis for assessing the profitability of a company and reveals earnings over time as a means of ensuring comparability with other companies.
Net earnings adjusted for exceptionals. Provides a basis for assessing the profitability of a company and reveals earnings over time as a means of ensuring comparability with other companies.
Free Cash Flow: definition:Surplus liquidity generated by a company with its business activities.
Surplus liquidity generated by a company with its business activities. Reflects internal funding capabilities required by a company for capital spending, repaying debt, paying dividends and feeding its financial requirements.
Free broker: definition:Stock market brokers arranging securities transactions between banks.
Stock market brokers arranging securities transactions between banks. They fix the price of securities in the regulated market in OTC trading.
OTC trading: definition:This is the segment of the stock exchange in which securities not admitted to official trading or the regulated market are traded.
This is the segment of the stock exchange in which securities not admitted to official trading or the regulated market are traded. They are included in OTC trading in the individual stock markets at the request of a “company admitted to stock market trading”, mostly a bank provided that orderly stock market trading appears to be possible. Prices are determined by special brokers and published on each trading day.
Fundamental analysis: definition:Fundamental analysis identifies key company data to assess a share and also includes macroeconomic parameters such as order receipts, wage trends and exchange rates.
Tradability: definition:Refers to securities which can be freely traded. The stock exchange is a market for tradable assets.
Refers to securities which can be freely traded.
Future: definition:Transaction in which securities (equities or bonds) are bought or sold at a fixed price on a date in the future.