Balance sheet: A statement of the accounts of a company that reflect its financial situation at a given time. There are two main items on the balance sheet, assets and liabilities, which must have an equivalent value.
BMV: Bolsa Mexicana de Valores, the Mexico City stock exchange.
Broker: An agent that acts as an intermediary, in exchange for a commission and on behalf of a third party, on different financial markets and puts buyers and sellers in contact with one another.
Capital gains: The difference between the sale price and the purchase price of a
financial asset.
Discounting rate: A mathematical coefficient used to obtain the present value of future funds. This rate is related to interest rates, inflation and the future date of the flows
in question.
Dividend: A share in the profits of a company that is distributed among shareholders.
EBITDA: Abbreviation of Earnings Before Interests, Taxes, Depreciation and Amortization.
Financial leverage: The effect that contracting debt has on the profitability of a company, which may produce better results than it would if it relied solely on its own resources.
Free cash flow: Calculated as operating cash flow, minus net interest costs, investments in fixed assets, changes in working capital, taxes paid, preferential capital dividends and other cash outlays (other net costs minus sales of non-operative assets). Free cash flow is not an indicator that is used under generally accepted accounting principles.
GDP (Gross Domestic Product): The value of the final goods and services produced by an economy
Índice de Precios y Cotizaciones (IPC): An indicator of the performance of the Mexico City stock market as a whole. It is calculated according to the variations in the prices of a sample of shares, which is balanced and weighted and is representative of all the shares traded on the BMV.
Interest: A price paid by a debtor to a creditor in exchange for using the financial resources provided by the latter during a certain period of time.
Interest coverage: Calculated by dividing operating cash flow over the last twelve months by the total for interest expenses and preferential dividend payments over the last
twelve months.
Liquidity: This is an expression of the degree of ease with which a financial asset may be converted into money.
Net debt: Equivalent to total debt plus capital obligations, less cash and
marketable investments.
Net debt over operating cash flow: Calculated by dividing net debt at the close of the quarter by operating cash flow for the last twelve months.
Net working capital: Equivalent to operating accounts receivable (including other current assets received as payment in kind) plus historical stocks less operating accounts payable.
New York Stock Exchange (NYSE): Compound stock exchange composed of four separate indices: industrial, utilities, transport and finances. It is the oldest and largest stock exchange in the USA and is based on the close of trading on the 31st of December 1965, which was assigned a value of 50 points.
Operating cash flow: Equivalent to operating profits plus depreciation and amortization. Amortization is not accounted for in operating profit, but under other earnings (expenses). Operating cash flow also excludes certain extraordinary earnings and costs, which under Mexican GAAP are not recorded as part of operating profit. Operating cash flow is not an indicator that is used under generally accepted accounting principles.
SEC (Securities & Exchange Commission): A federal agency that regulates the financial markets in the USA. The SEC also supervises the securities and financial assets industry and promotes total transparency in order to protect investors against malpractice on the financial markets.
Share: A proportional part in the capital stock of a company. They tend to confer certain rights on their owners, including the right to receive part of the profit generated, the right to receive a part of the liquidation paid out in the case of dissolution, the right to vote at general meetings and preferential rights for the purchase of newly issued shares.
Stock market: An organized market that is fundamentally used to trade securities with a variable rate of return. Most also trade fixed rates and a range of assets.
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