bUsiness wOrLd definitions...........
This is a collection of the key terminologies and concepts used in modern business. If you have a comfortable grasp over these, you will definitely fare well in GK, Group Discussions, and Personal Interviews.
ABSOLUTE MONOPOLY: The exclusive control of the output of a commodity or service, for which no substitute is available, creating anunfair advantage for the producer who can charge exorbitant premiums, render poor services and still exploit the hapless consumers. An advantage of a free market economy is the creation of competition with lower chances of absolute monopolies getting a stronghold.
ACCOUNTING PERIOD The period of time covered by business, financial and management accounts. Financial accounts are generally prepared once or twice in an year, but the interval for management accounts must be much shorter in order to ensure adequate management control over the regular operations.
ACCUMULATED PROFIT: Profit which is not paid as dividend (to the shareholder) but is carried into the accounts of the following year.
ACQUISITION: Big fish eating little fish; one company taking over controlling interest in another company. High prices are often paid to acquire shares of the target company.
ACTIVE MARKET A market in which there is a lot of buying and selling. It generally indicates investor confidence and high liquidity conditions. The market could be of stocks, metals, grains, etc.
ACTIVE PARTNER A part-owner in a business partnership who is actively involved in the normal working operations of the business. Also called general partner. One who doesn't participate is a Sleeping partner.
ACTIVE SHARES Shares in which there are frequent and day today dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements.
ADMINISTERED PRICE: A price not set by the forces of demand and supply but by some authority like the government or a regulatory authority.
AFFIDAVIT A sworn statement made before a commissioner of oaths. It is sometimes needed by a company when a deed of transfer is signed by power of attorney.
AGGRIGATE DEMAND: The total demand for goods and services in an economy during a specific period. Also known as effective demand.
AMALGAMATION The combining of all or some of the assets and liabilities of two or more businesses into a single organization.
AMORTIZATION The gradual extinction of a debt or liability by means of periodic repayment or redemption, usually through the operation of a sinking fund.
AMERICAN DEPOSITORY RECEIPTS Public offerings by non-US companies in the US are called American Depository Receipts, (ADR). ADRs can be listed and traded in a US¬ based stock exchange. ADRs also help the US-based and other foreign investors to have the twin benefits of having shareholding in a high growth Indian company and the convenience of trading in a highly liquid and well-known stock market.
ANNUAL DEPRECIATION The reduction in book value of an asset at a certain % rate per annum.
ANNUITY A type of pension in which an insurance company pays an annual income in return for a lump sum payment.
APPRECIATION An increase in the value of an asset over its purchase price or book value.
APPROPRIATION BILL: A bill introduced in the Parliament together with the budget seeking the approval of the House to permit expenditure fromthe Consolidated Fund of India. .
ARBITRAGE: The practice of taking advantage of price differences in two markets.
Comments