Reference

Definitions of Financial Terms

Definitions for terms used across the Wright Investors' Service research reports, quality analysis, financial statements, and ratio analyses.

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279 terms in the glossary

A

Financial Term	Term Definition
Accounts Payable	Short-term debt (payable in 12 months or less) a company owes suppliers of goods and services. This amount is included in current liabilities on the balance sheet.
Accounts Receivable	Funds owed the company by customers (less bad debt write-offs) expected to be received within 12 months. This amount is included in current assets on the balance sheet.
Accrued Payroll	Payroll expenses incurred within the normal operating cycle of the company without being paid.
Accumulated Depreciation	The cumulative reduction of the carrying amount of tangible balance sheet assets to reflect loss of value due to wear, tear, and usage.
Acid-Test Ratio	Calculated by dividing Current Assets less Inventory by Current Liabilities. This ratio measures the ability of a company to use its liquid assets to extinguish its current liabilities.
After Tax Other Income/Expense	Other income and expense not subject to corporate income taxes.
After-Tax Profit Margin	Net Income divided by Net Sales or Revenues. Measures what portion of each revenue dollar is retained as profit after all expenses and taxes.
Amortization of Intangible Assets	A non-cash annual reduction of the carrying amount of intangible balance sheet assets such as copyrights, trademarks, patents etc. recognized over the useful life of the assets.
Asset Turnover	Net Sales or Revenues divided by Total Assets. Indicates how efficiently a company uses its assets to generate sales.
Assets	Any item owned by a corporation which can be expected to provide future economic benefit.
Assets Per Share	A ratio computed by dividing assets by the same number of shares used to compute earnings per share.

B

Financial Term	Term Definition
Balance Sheet	A financial statement that lists a company's assets, liabilities, and shareholders' equity at a specific point in time.
Book Value Per Share	Common Equity divided by the number of common shares outstanding. Represents the per-share value of equity as recorded on the balance sheet.
Business	Any activities of a firm that provide services or sell goods in order to earn a profit.

C

Financial Term	Term Definition
Capital Expenditure % of Sales	A ratio indicating the amount of capital expenditures for property, plant and equipment (excluding acquisitions) for every dollar's worth of sales or revenues.
Capital Expenditures	Funds used by a company to acquire, upgrade, or maintain physical assets such as property, buildings, or equipment.
Capital Structure	The mix of long-term debt, preferred stock, and common equity a company uses to finance its operations and growth.
Capitalized Lease Obligations	A lease having the economic characteristic of asset ownership and classified as an asset on a company's balance sheet.
Cash	Currency (paper or coins) or negotiable checks and money orders that can be used to purchase goods and services or reduce debt. Cash is the most liquid company asset.
Cash & Short Term Investments	Made up of Cash (Currency and negotiable checks and money orders) and Investments maturing in one year or less. These assets are more liquid than other components of Current Assets such as Accounts Receivable and Inventory.
Cash & Short Term Investments % of Current Assets	A ratio of Cash and Short-term Investments divided by total Current Assets.
Cash % of Current Assets	The ratio which measures the extent to which Cash is a component of total Current Assets. It is calculated by dividing Cash by total Current Assets.
Cash Earnings per Employee	The ratio of a company's Cash Earnings (also known as Cash Flow) to the number of full-time employees. In comparison with other companies in the same sector, it is a measure of employee productivity.
Cash Earnings Per Share	Cash Earnings (also known as Cash Flow) divided by the same number of shares used to compute earnings per share. It is a measure of a company's ability to pay dividends to shareholders.
Cash Flow	The net amount of cash and cash equivalents moving into and out of a business over a defined period.
Cash Flow - Financing Activities	Funds related to the financing activities (stock sales or repurchases, debt issues or repayments, dividend payments) of the company reported on the cash flow statement of the quarterly and annual reports.
Cash Flow - Investing Activities	Funds related to the investing activities (capital expenditures, investments) of the company reported on the cash flow statement of the quarterly and annual reports.
Cash Flow - Operating Activities	Funds related directly to the company's income-producing operations (net income, changes in accounts payable, accounts receivable and inventory) reported on the Cash Flow statement of the quarterly and annual reports. Depreciation, depletion, amortization, and deferred taxes are also added back to net income to derive Cash Flow from Operations.
Cash Flow % Sales	A ratio of a company's Cash Flow to annual sales representing a measure of how much cash is generated by each dollar of sales. The higher the ratio the more profitable the company.
Cash Flow Per Share	Net Income plus Depreciation divided by the number of common shares outstanding. Measures operational cash generation on a per-share basis.
Common Dividends Per Share	A potentially taxable payment to its common shareholders declared by a company's board of directors and paid out of the company's cash flow or retained earnings. Dividends are usually distributed as cash, but they can also take the form of stock or other property.
Common Equity	The residual ownership interest in a company's assets after deducting all liabilities. Also referred to as shareholders' equity or book value.
Common Equity % of Total Assets	A ratio of Common Equity to Total Assets representing a traditional measure of financial leverage. Generally, companies who finance a greater portion of their assets with equity rather than debt, are considered to be less risky.
Common Equity % of Total Capital	A ratio of Common Equity to Total Capital representing a traditional measure of financial leverage. Generally, companies who finance a greater portion of their assets with equity rather than debt, are considered to be less risky.
Common Equity Per Share	Total Common Equity divided by shares outstanding. Also called book value per share.
Company Financials	Various accounting statements like the income statement, balance sheet and cash flow statement. Financial statements summarize all the transactions that have occurred over a specific period.
Corporate Growth	A Wright Quality component measuring the rate at which earnings, dividends, book value, and sales have grown over a multi-year period.
Cost of Goods Sold	The direct costs attributable to the production of goods sold by a company, including materials and direct labour.
Country	The name of the country where the company is domiciled.
Currency	The currency of data items.
Current Assets	Assets expected to be converted to cash or consumed within one year, including cash, accounts receivable, and inventory.
Current Assets - Total	The value of all assets that are reasonably expected to be converted into cash usually within one year. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets.
Current Liabilities	Obligations a company must settle within one year, including accounts payable, accrued expenses, and short-term debt.
Current Liabilities - Total	The value of a company's debts or obligations that are usually due within one year. Current liabilities include short-term debt, accounts payable, accrued liabilities, taxes payable, dividends payable and other short-term obligations.
Current Ratio	Current Assets divided by Current Liabilities. Measures a company's ability to pay short-term obligations with its short-term assets.

D

Financial Term	Term Definition
Days of Inventory	Inventory divided by the daily cost of goods sold. Measures the average number of days inventory is held before being sold.
Days of Receivables	Accounts Receivable divided by daily Net Sales. Measures the average number of days it takes to collect payment after a sale.
Debt	Usually refers to debt maturing in one year or more.
Debt-to-Equity Ratio	Total Liabilities divided by Common Equity. Indicates the proportion of financing that comes from creditors versus shareholders.
Deferred Charges	Obligations due to creditors and suppliers within a period of time greater than one year. Since related income is received over an extended period, recording deferred charges in this manner ensures that a company is adhering to Generally Accepted Accounting Principles (GAAP) by matching revenues with expenses.
Deferred Income	Income a company collects before it actually delivers a product or service. It represents income received but not yet earned.
Deferred Income Taxes	A liability recorded on the balance sheet that results from a reconciliation of income already earned and recognized for accounting, but not for tax purposes. In other words, differences between tax laws and accounting methods can result in a temporary inconsistency in the amount of income tax payable by a company. This inconsistency is recorded as deferred income tax.
Deferred Income Taxes & Investment Tax Credit	The increase or decrease in the Deferred Tax Liability and Investment Tax Credit from one year to the next.
Deferred Tax Liability in Untaxed Reserves	The portion of untaxed reserves allocable to deferred taxation.
Deferred Taxes	A liability recorded on the balance sheet that results from a reconciliation of income already earned and recognized for accounting, but not for tax purposes. In other words, differences between tax laws and accounting methods can result in a temporary inconsistency in the amount of income tax payable by a company. This inconsistency is recorded as deferred income tax.
Deferred Taxes - Credit	The credit balance of the Deferred Tax account.
Deferred Taxes - Debit	The debit balance of the Deferred Tax account.
Depreciation	The systematic allocation of the cost of a tangible asset over its useful life.
Depreciation & Depletion	Depreciation is an expense recorded to allocate a tangible asset's cost over its useful life reflecting the loss in value because of wear, tear and usage. Depletion represents the allocation of cost for natural resources such as mineral deposits and oil. Since Depreciation and Depletion are non-cash expenses, they increase free cash flow despite decreasing reported earnings.
Depreciation, Depletion & Amortization	Depreciation is an expense recorded to allocate a tangible asset's cost over its useful life reflecting loss in value because of wear, tear and usage. Depletion represents the allocation of cost for natural resources such as mineral deposits and oil. Amortization relates to the write off, over time, of the cost for intangible assets such as copyrights, patents and leasehold improvements, trademarks, bookplates, tools and film cost. Since Depreciation, Depletion and Amortization are non-cash expenses, they increase free cash flow despite decreasing reported earnings.
Discontinued Operations	The earnings (or loss) of a division or business segment that the company plans to discontinue or dispose of in the near future.
Dividend Payout	The percentage of earnings paid out to shareholders in the form of cash dividends. Earnings not paid out are retained by the company and reinvested in the business.
Dividend Payout Ratio	Dividends Per Share divided by Earnings Per Share. The fraction of earnings distributed to shareholders as dividends.
Dividend Per Share	Total dividends declared divided by common shares outstanding over a period.
Dividend Yield	Annual dividends per share divided by the current market price per share. Expresses dividends as a percentage of share price.
Dividends - Total	The total amount of dividends declared by a company's board of directors and distributed to its shareowners out of current or retained earnings. Dividends are usually distributed as cash, but they can also take the form of stock or other property.
Dividends Payable	The dollar amount of dividends declared by the board of directors but not yet paid to shareholders.
Dividends Per Share	A cash payment usually declared quarterly by a company's board of directors and distributed to its shareholders out of current or retained earnings divided by the number of common shares outstanding.

E

Financial Term	Term Definition
Earned Growth	The difference between earnings for the year and dividends for the year, divided by book value at the beginning of the year, expressed as a percentage. Based on calendar year period for U.S. companies and fiscal year period for non-U.S. companies.
Earnings before Interest and Taxes (EBIT)	The earnings of a company, including non-cash items, before deductions for interest expense and income taxes. It is an indicator of profitability without regard to the company's financial structure. EBIT is also referred to as operating earnings, operating profit and operating income.
Earnings before Interest, Taxes, Depreciation & Amortization (EBITDA)	The earnings of a company before interest expense, income taxes, and (non-cash) depreciation and amortization. It is a significant indicator of a company's Cash Flow from operations.
Earnings Per Share	Net Income available to common shareholders divided by weighted average shares outstanding. A primary measure of per-share profitability.
Earnings Per Share - 12 Months	Sum of any earnings per share during the last twelve months.
EBIT	Earnings Before Interest and Taxes. A measure of operating profitability before the effects of financing and taxation.
EBITDA	Earnings Before Interest, Taxes, Depreciation, and Amortization. Approximates a company's core operating cash flow.
Effective Tax Rate	The amount of income taxes actually paid by a firm as a percent of pretax income.
Employees	Number of full-time employees at fiscal year end.
Equity	The value of a company's assets minus its liabilities; the residual claim of shareholders.
Equity in Earnings	Earnings or losses of an unconsolidated subsidiary in proportion to the parent company's equity interest..
ESOP Guarantees - Preferred Issued	Guarantees made by the company for loans incurred by Employee Stock Option Plans (ESOP) for the purchase of the company's common shares by employees. Purchased stock is held as collateral until the loan is repaid. An ESOP is a qualified, defined contribution, employee benefit (ERISA) plan.
Extraordinary Charge - Pretax	Infrequent and unusual pre-tax charges segregated on the income statement and usually explained in the notes to the financial statements.
Extraordinary Credit - Pretax	Infrequent and unusual pre-tax credits segregated on the income statement and usually explained in the notes to the financial statements.
Extraordinary Credit - Pretax % of Net Sales or Revenues	A ratio to Total Sales of infrequent and unusual pre-tax credits segregated on the income statement and usually explained in the notes to the financial statements.
Extraordinary Items & Gain/Loss Sale of Assets	Gain and loss resulting from infrequent, unusual and nonrecurring events such as the sale of segments of a business or the sale of an entire subsidiary. The disposition could have taken place either in the current accounting period or in past year.
Extraordinary Items Per Share	Extraordinary gains and losses divided by the same shares used to calculate per share earnings.

F

Financial Term	Term Definition
Financial Leverage	The amount of debt in the capital structure of a company used to finance assets. A firm with significantly more debt than equity is considered to be highly leveraged.
Financial Ratios	Ratios based on the financial data of a company utilized by management, investors and analysts to determine comparative value, profitability, liquidity, leverage, and solvency.
Financial Strength	A Wright Quality component evaluating the solidity of a company's capital structure, debt levels, and balance sheet health.
Finished Goods	Fully-completed products that are considered to be that portion of inventory ready for sale and delivery.
Fiscal Year	Any 12-month period a company uses for accounting purposes that may or may not be the same as a calendar year.
Fiscal Year End Date	The end date of the completion of a 12-month accounting period that may or may not be the same as end date of the calendar year.
Fixed Assets % of Common Equity	Long-term tangible and intangible assets used in the production of goods and services as a percent of common shareholders' equity.
Fixed Charge Coverage Ratio û EBIT / (Total Interest Expense ) + [(Preferred Dividends) / (1-tax rate)/100]	A measure of the ability of a company to pay its fixed charges calculated by dividing Earnings Before Interest and Taxes by interest expense and preferred dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBIT / Dividends on Common Shares	A measure of the ability of a company to pay its common stock dividends calculated by dividing Earnings Before Interest and Taxes by common stock dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBIT / Net Interest Expense	A measure of the ability of a company to pay its net interest charges calculated by dividing Earnings Before Interest and Taxes by net interest expense.
Fixed Charge Coverage Ratio û EBIT / Total Interest Expense	A measure of the ability of a company to pay its total interest charges calculated by dividing Earnings Before Interest and Taxes by total interest expense.
Fixed Charge Coverage Ratio û EBIT/ (Dividends on Common Shares) + [(Preferred Stock)/ (1-tax rate)/100]	A measure of the ability of a company to pay its total dividends. It is calculated by dividing Earnings Before Interest and Taxes by common and preferred dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBITDA / (Dividends on Common Shares + Preferred Stock)	A measure of the ability of a company to pay its total dividends. It is calculated by dividing Earnings Before Interest, Taxes, Depreciation and Amortization by common and preferred dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBITDA / (Total Interest Expense) + [(Preferred Dividends)/ (1-tax rate)/100]	A measure of the ability of a company to pay its fixed charges. It is calculated by dividing Earnings Before Interest, Taxes, Depreciation and Amortization by interest and preferred dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBITDA / Dividends on Common Shares	A measure of the ability of a company to pay its common stock dividends. It is calculated by dividing Earnings Before Interest, Taxes, Depreciation and Amortization by common stock dividends adjusted for taxes.
Fixed Charge Coverage Ratio û EBITDA / Net Interest Expense	A measure of the ability of a company to pay its net interest expense. It is calculated by dividing Earnings Before Interest, Taxes, Depreciation and Amortization by net interest expense.
Fixed Charge Coverage Ratio û EBITDA / Total Interest Expense	A measure of the ability of a company to pay its total interest expense. It is calculated by dividing Earnings Before Interest, Taxes, Depreciation and Amortization by total interest expense.
Fixed Charges Coverage	Earnings before interest and taxes divided by fixed charges such as interest expense. Measures the company's ability to meet fixed financial obligations.
Flow of Funds	An analysis of how cash moves through a business — covering operating, investing, and financing activities — to explain sources and uses of funds.
Free Cash Flow	Cash from operations minus capital expenditures. Represents cash available after maintaining or expanding the asset base.
Free Cash Flow Per Share	Cash that a company generates solely from operations after laying out the money required to maintain or expand its asset base divided by the same shares used to calculate per share earnings. Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments. It is calculated as operating cash flow (net income plus amortization and depreciation) minus capital expenditures and dividends.
Fully Diluted Earnings Per Share	Earnings per share calculated by dividing net income adjusted to add back preferred dividends of convertible preferred stock and interest expense of convertible bonds by the number of weighted average common shares outstanding. The weighted average number of shares is adjusted by adding shares, assuming all convertible securities such as warrants, options, outstanding convertible preferred shares and convertible bonds, are converted into common.
Funds from Operations % of Current Liabilities	A liquidity ratio which is computed as net income plus depreciation, depletion and amortization and other non-cash charges divided by Current Liabilities, expressed as a percentage.
Funds from Operations % of Long Term Debt	A liquidity ratio which is computed as net income plus depreciation, depletion and amortization and other non-cash charges divided by Long-term Debt, expressed as a percentage.
Funds from Operations % of Total Capital	A liquidity ratio which is computed as net income plus depreciation, depletion and amortization and other non-cash charges divided by Total Capital (Long-term Debt, Minority Interest, Preferred Stock and Common Equity), expressed as a percentage.
Funds from Operations % of Total Debt	A liquidity ratio which is computed as net income plus depreciation, depletion and amortization and other non-cash charges divided by Total Debt (Short and Long-term Debt), expressed as a percentage.

G

Financial Term	Term Definition
Goodwill	An intangible asset representing the excess of the purchase price of an acquired business over the fair value of its identifiable net assets.
Gross Income	Net Sales or Revenues minus Cost of Goods Sold. Also called gross profit.
Gross Income Margin	Total sales or revenue minus cost of goods sold divided by total sales or revenue, expressed as a percentage Gross income margin indicates how much a company earns after incurring expenses on the production of its goods and services.
Gross Profit Margin	Gross Income divided by Net Sales or Revenues. Measures the percentage of revenue retained after direct production costs.
Gross Property, Plant & Equipment Turnover	A ratio of Net Sales to Gross Property, Plant & Equipment. Gross Property, Plant & Equipment Turnover measures a firm's efficiency in using its assets to generate sales or revenue - the higher the number the better.

I

Financial Term	Term Definition
Income Before Taxes	A company's earnings after deducting all operating expenses and interest but before income tax expense.
Income Statement	A financial statement summarising a company's revenues, expenses, and profit or loss over a specified period.
Income Taxes	An annual tax on any income earned during a fiscal year.
Income Taxes Payable	The sum of income taxes owed by a company and due within one year. Income taxes payable are debts that must be paid off within a given period of time in order to avoid fines and asset confiscation.
Indicated Dividends per Share	The expected cash dividends per share during the next twelve months. It is usually calculated as four times the most recently reported quarterly dividend per share plus any extra dividend reported during the twelve months period.
Intangible Other Assets	An asset that is not physical in nature such as goodwill and corporate intellectual property (e.g., brand names, franchise rights, patents, trademarks, copyrights).
Interest Capitalized	Interest payable but not yet paid. It is shown on the Income Statement in order to match Net Sales with related expenses.
Interest Coverage Ratio	Operating Income divided by Interest Expense. Measures how easily a company can meet its interest obligations from earnings.
Interest Expense	The cost of borrowed funds, reported as an expense on the income statement.
Interest Expense on Debt	A fee charged by lenders to a company for borrowing funds which include short-term debt, long-term debt, and capitalized leased obligations.
Inventories - Total	The value of a company's raw materials, work-in-process goods and final goods which have not yet been sold. Inventories are part of a company's current assets since they can be converted into cash easily to pay off short-term debt and other current liabilities.
Inventories % of Current Assets	A ratio to Current Assets of the value of a company's raw materials, work-in-process goods and finished goods which have not yet been sold. Inventories as a percent of Current Assets is one of the measures of the liquidity and financial strength of a company.
Inventory	Goods held by a company for sale or use in production, recorded as a current asset on the balance sheet.
Inventory to Cash & Equivalents - Number of days	A ratio computed by dividing the amount of Inventories by average daily Cash and Equivalents. This ratio indicates the structure of Current Assets and is best used in comparative analysis with companies in the same industry sector.
Inventory Turnover	Cost of Goods Sold divided by average Inventory. Measures how frequently inventory is sold and replaced over a period.
Investment Acceptance	A Wright Quality component evaluating overall investment quality, derived from earnings stability, dividend record, and financial strength.
Investment in Associated Companies	An investment in a company by another larger company which controls more than 50% of the voting stock.
Investment Tax Credits	An amount by which income tax liability is diminished for companies that make new investments encouraged by the federal government. It is deducted from the tax bill, not from pretax income.

L

Financial Term	Term Definition
Leverage	The use of borrowed capital (debt) to amplify potential returns on equity, also increasing financial risk.
Leverage Ratio	A family of ratios measuring the extent to which a company uses debt financing, such as debt-to-equity or debt-to-assets.
Liabilities & Shareholders' Equity	A combination of financial obligations, debt, claims, or potential losses (current and long term) plus common shareholders' investment in a company including paid-in capital and retained earnings.
Liquidity	The ability of a company to meet short-term financial obligations using its current assets and cash flows.
Long Term Debt	Financial obligations such as bonds, loans, notes and capitalized obligations, which have maturities greater than one year. It also includes revolving credits and long-term advances from affiliates. Represents the proportion of financial leverage in a company's capital structure.
Long Term Debt Excluding Capitalized Leases	Long-term financial obligations excluding capitalized lease obligations.
Long Term Receivables	All debts, unsettled transactions or other monetary obligations owed to a company due after one year.
Long-Term Debt	Debt obligations with a maturity of more than one year, such as bonds, mortgages, and long-term bank loans.

M

Financial Term	Term Definition
Major Industry	The major industry sector to which a company belongs.
Market Capitalization	A measure of the value of the company calculated by multiplying the market price of the common stock by the number of outstanding common shares. Based on this, companies are sometimes classified as large cap, medium cap and small cap.
Market Price - Close	Closing market price of the company's common stock for a specific ending period like a day, week, quarter or year.
Market Price - High	The high market price of the company's common stock for a day, week, month, quarter or year.
Market Price - Low	The low market price of the company's common stock for a day, week, month, quarter or year.
Minority Interest	The amount of consolidated net assets that does not belong to the parent company.
Most Recent Quarterly Dividends per Share	The most recently declared quarterly dividends per share.
Most Recent Quarterly Earnings per Share	The most recent reported quarterly earnings per share.

N

Financial Term	Term Definition
Net Cash provided by Continuing Operations	Funds related directly to the company's income-producing continuing operations (net income, changes in accounts payable, accounts receivable and inventory) reported on the Cash Flow statement of the quarterly and annual reports. Depreciation, depletion, amortization, and deferred taxes are also added back to net income to derive Cash Flow from Continuing Operations.
Net Change in Liabilities	Year-over-year dollar change in the financial obligations, debt, claims, or potential losses (current and long term) of the company.
Net Change in Operating Assets and Liabilities Net of Acquisitions & Divestitures	Net change in operating assets and liabilities excluding recent acquisitions and divestitures.
Net Income	A company's total earnings after all expenses, taxes, and interest have been deducted from total revenues.
Net Income (Continuing Operations) Per Share	The amount earned (or lost) by the continuing operations of a company after paying all expenses divided by the weighted average number of common shares outstanding. Earnings Per Share is generally considered to be the single most important variable in determining a company's common share price.
Net Income after Preferred Dividends - available to Common	The amount earned (or lost) by a company after paying all expenses including preferred dividends.
Net Income Available to Common Per Share	A financial measure usually calculated by dividing a company's. Net Income after Preferred Dividends by weighted average common shares outstanding during the fiscal year.
Net Income before Extraordinary Items Per Share	A financial measure usually calculated by dividing a company's. Net Income before Extraordinary Items by weighted average common shares outstanding during the fiscal year.
Net Income before Extraordinary Items/Preferred Dividends	The amount earned (or lost) by a company after paying all expenses but before extraordinary gains or losses and preferred dividends.
Net Income Margin	Net income divided by net sales or revenues. Measures how much out of each dollar of sales a company keeps as earnings. This ratio is very useful in evaluating the comparative profitability of companies in the same industry.
Net Income per Employee	Net income in relation to the number of full-time employees. It is calculated by dividing Net Income by the number of full-time employees.
Net Income Per Share - Basic	The amount earned (or lost) by the company after paying all expenses and preferred dividends divided by the weighted average number of common shares outstanding.
Net Income Per Share - Fully Diluted	Net Income adjusted for the interest and dividends of convertible securities by the weighted average number of shares outstanding adjusted to reflect the conversion of all warrants, stock options and convertible securities (bonds and preferred stock) if any.
Net Income Per Share after Extraordinary Items.	A financial measure usually calculated by dividing a company's Net Income after Extraordinary Items by weighted average common shares outstanding during the fiscal year.
Net Profit Margin	Net Income divided by Net Sales or Revenues. The percentage of revenue that becomes profit.
Net Property, Plant and Equipment Turnover	The amount of sales generated for every dollar's worth of tangible fixed assets with an expected useful life of over one year after adjusting for depreciation. Net PP&E turnover measures a firm's efficiency of using its assets in generating sales or revenue.
Net Sales or Revenues	Total revenue from goods and services sold, less returns, allowances, and discounts.
Non-Equity Reserves	Not applicable to U.S. corporations, this item represents reserves such as revaluation reserves, specific reserves, government investment subsidies etc.set aside from shareholders' equity without naming a designated payee.
Non-Operating Interest Income	Income generated from the non-operating interest-bearing investments of the company.

O

Financial Term	Term Definition
Officers	A list of the names of key officers of the company with their designation.
Operating Expenses - Total	Expenses which arise from the normal operating activities of the business including cost of goods sold plus operating and administrative expenses.
Operating Income	Gross Income minus selling, general, and administrative expenses and other operating costs. Represents profit from core operations.
Operating Income Margin	An important measure of profitability calculated as the difference between Net Sales or Revenue of the company and related costs and expenses (cost of goods sold plus operating and administrative expenses) divided by Net Sales or Revenue, expressed as a percentage.
Operating Income Return on Total Capital	A significant measure of comparative profitability. This ratio is calculated by dividing Operating Income by Total Capital.
Operating Margin	Operating Income divided by Net Sales or Revenues. Measures how efficiently a company converts sales into operating profit.
Other Accrued Expenses	Those accrued expenses not included in accrued payroll, interest payable, dividends payable or income taxes payable. These expenses are recognized when incurred even though they are not actually paid in cash.
Other Assets	A residual of assets of the company other than current assets, long-term receivables, investment in unconsolidated subsidiaries, other investments and net property, plant and equipment.
Other Current Assets	All other non-cash current assets besides cash and equivalents, receivables, inventories and prepaid expenses.
Other Current Liabilities	All other current liabilities other than accounts payable, short-term debt, accrued payroll, income taxes payable, and dividends payable.
Other Financial	A Wright company classification for financial companies that do not fit the bank or insurance categories.
Other Income/Expense - Net	Other pretax income net of expenses besides operating income and expense, non-operating interest income and expense, interest expense on short and long term debt, capitalized interest, pretax non-recurring gain or losses and change in reserves.
Other Investments	Any other long-term investments except those in unconsolidated subsidiaries.
Other Liabilities	Obligations of the company besides current liabilities, long-term debt, capitalized leased obligations and deferred charges that do not currently require interest payments.
Other Operating Expenses	All other operating expenses beside interest expense, salaries and benefits expense, equipment expense and provisions for loan losses.

P

Financial Term	Term Definition
Per Share Data	Financial metrics — such as earnings, dividends, book value, and cash flow — expressed on a per-common-share basis.
Percent (%) Held by Insiders	Percent of publicly-held voting shares owned by officers, directors, their families, trusts, foundations and shareholders who individually own 10% or more of the shares.
Pre-Tax Income	Earnings before income taxes are deducted. Equivalent to Income Before Taxes.
Pre-Tax Margin	Pre-Tax Income divided by Net Sales or Revenues. Measures profitability before tax effects.
Preferred Dividend Requirements	The amount of annual income required to be paid through an actual cash dividend payment to preferred stock owners or the provision for preferred dividends, if in arrears.
Preferred Stock	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company than common shareholders in the event of liquidation. Preferred stock generally has a specified and fixed dividend rate that must be paid out before dividends are paid to common stockholders.
Preferred Stock % of Common Equity	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company in the event of liquidation than common shareholders as a percent of Common Equity.
Preferred Stock % of EBIT	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company in the event of liquidation than common shareholders as a percent of Earnings before Interest and Taxes.
Preferred Stock % of EBITDA	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company in the event of liquidation than common shareholders as a percent of Earnings before Interest, Taxes, Depreciation and Amortization.
Preferred Stock % of Total Assets	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company in the event of liquidation than common shareholders as a percent of Total Assets.
Preferred Stock % of Total Capital	A type of ownership (usually non-voting) that has a higher claim on the earnings and assets of the company in the event of liquidation than common shareholders as a percent of Total Capital. Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's comparative risk exposure.
Preferred Stock Issued for ESOP	The total number of preferred shares issued to the Employee Stock Option Plan (ESOP). This includes all the shares that are fully paid for as well as those covered by a pledge made by the company to insure a loan incurred for the purchase of preferred shares.
Prepaid Expenses	An advance payment, recorded in the current assets on the balance sheet, made by a company for goods or services to be received after the completion of its normal operating cycle.
Prepaid Expenses - % of total assets	An advance payment, recorded in the current assets on the balance sheet, made by a company for goods or services to be received after the completion of its normal operating cycle as a percent of Total Assets.
Pretax Equity in Earnings	The pretax portion of the earnings (or losses) of a subsidiary whose financial accounts are not consolidated with the parent company's accounts.
Pretax Income	Income after deducting all tax-deductible expenses.
Pretax Income Margin	Income after deducting all tax-deductible expenses as a percent of Net Sales or Revenues. This ratio is a key measure of comparative profitability.
Pretax Income Per Share	Income after deducting all tax-deductible expenses divided by the weighted average number of common shares outstanding.
Price % Change - 12 Months	Percent change in the common stock price per share during the last 12 months.
Price % Change - 13 Weeks	Percent increase or decrease in common stock price during the past thirteen week period.
Price % Change - 4 Weeks	Percent increase or decrease in common stock price during the past four week period.
Price % Change - 52 Weeks	Percent increase or decrease in common stock price during the past fifty-two week period.
Price % Change - Week	Percent increase or decrease in common stock price during the past week.
Price-to-Book Ratio	Market price per share divided by Book Value Per Share. Compares market valuation to the accounting value of equity.
Price-to-Earnings Ratio	Market price per share divided by Earnings Per Share. The most widely used valuation multiple.
Price/Book Ratio (P/BV)	The relationship of a company's market value to its Common Shareholders' Equity (book value) at the beginning of the year. It is derived by dividing the common stock price by per share book value at the beginning of the period.
Price/Earnings Ratio (P/E)	The relationship of the company's common stock price to earnings per share derived by dividing the common stock price by Last 12 Months Earnings. This is the key ratio in the determination of comparative corporate value.
Price/Sales Ratio (P/S)	The relationship of a company's market value to its Net Sales or Revenues at the beginning of the year. It is derived by dividing the common stock price by average per share sales.
Profitability & Stability	A Wright Quality component assessing the level and consistency of a company's earnings and returns over time.
Progress Payments & Other	Periodic payments made to service providers for work on long-term contracts satisfactorily completed to date. Also refers to disbursements by lending firms to contractors under contractual loan arrangements.
Property Plant and Equipment - Gross	Tangible fixed assets with an expected useful life of over one year before adjusting for depreciation.
Property Plant and Equipment - Net	Tangible fixed assets with an expected useful life of over one year after adjusting for depreciation.
Provision for Risks and Charges	Estimated reserves for pension funds, repairs and maintenance, litigation claims, etc.

Q

Financial Term	Term Definition
Quarterly Price % Change	The percent change in a common stock price for a given quarter.
Quarterly Reported Dividends per Share	Dividends that companies in the U.S. declare quarterly. In some other countries, companies declare semi-annual or annual dividends. Semi-annual dividends are divided by two and annual dividends by four to express such dividends at a quarterly rate.
Quarterly Reported Earnings Per Share	The amount earned (or lost) per share for a quarter after paying all expenses.
Quick Ratio	Cash plus short-term investments plus receivables divided by Current Liabilities. A stricter measure of liquidity than the current ratio.

R

Financial Term	Term Definition
Raw Materials	Natural resources, materials or substances such as oil, iron ore, paper and wood used in the primary production or manufacturing of goods.
Receivables - Number of Days	The average number of days required to collect receivables. It shows the comparative efficiency of the collection policy of the company.
Receivables (Net)	Gross accounts receivable owed to the company less bad debt write-offs.
Receivables % of Total Assets	Sales for which money has not yet been collected as a percent of Total Assets. The ratio indicates one of the measures of comparative liquidity and financial strength.
Receivables including Financial Receivables	Accounts Receivable owed to the company including financial receivables less bad debt write-offs. Companies may use receivables as collateral for short-term loans from bank or factoring entities. The amount a company can borrow depends on the age of the receivables.
Receivables Turnover	Calculated as Net Sales or Revenues divided by Accounts Receivable, this ratio suggests the number of times the amount of credit sales are collected during the year.
Research & Development Expense	Funds expended for Research on improving existing products and the Development of new products, procedures and marketing techniques.
Research and Development	Expenditure aimed at creating new or improved products and processes, expensed in the period incurred under most accounting standards.
Reserves - Increase/Decrease	Changes to discretionary Reserves included in net income of European companies.
Retained Earnings	Earnings not paid out as dividends or allocated to a reserve account, instead kept to reinvest in the company. It is shown as a line item on balance sheet under shareholders equity. It is also known as earned surplus and undistributed earnings or profits.
Retained Earnings Per Share	Earnings not paid out as dividends or allocated to a reserve account, instead kept to reinvest in the company divided by the weighted-average number of common shares outstanding.
Return on Assets	Net Income divided by Total Assets. Measures how efficiently a company uses its assets to generate profit.
Return on Assets (ROA)	Calculated by dividing Net Income by Total Assets at the beginning of period. This ratio indicates how efficiently management is using a company's Total Assets to generate profits.
Return on Equity	Net Income divided by Common Equity. Measures the return generated on shareholders' investment.
Return on Equity (ROE)	Calculated by dividing Net Income by Common Shareholders' Equity at the beginning of period. This ratio indicates how efficiently management is using a company's Common Shareholders' Equity to generate profits.
Return on Invested Capital	Calculated by dividing Income before interest, taxes and dividends by Total Capital (common shareholders' equity, preferred stock, minority interest and long-term debt including capitalized lease obligations) at the beginning of period. This ratio indicates how efficiently management is using a company's Total Capital to generate profits.
Return on Investment	A general measure of the gain or loss generated relative to the amount invested.
Revenues	Money received from the sale of goods or services less returns, allowances, discounts and freight out.

S

Financial Term	Term Definition
Sales	Money received from the sale of goods or services less returns, allowances, discounts and freight out.
Sales Per Employee	Net Sales or Revenues divided by number of employees. A measure of workforce productivity.
Sales Per Share	Derived by dividing Net Sales or Revenues over a 12-month period by the weighted-average number of common shares outstanding used to compute Earnings Per Share. The sales-per-share ratio, often in comparison to its common share price, is used to evaluate the success of a company's business activities.
Selling, General & Administrative Expenses	Operating expenses not directly tied to production, including salaries, marketing, and overhead.
Share Type	The name of the security whose prices and dividends are shown with the company's fundamental financial data. The share name is usually shown in the language of the country in which the company is domiciled.
Shareholders' Equity	Total assets minus total liabilities. The book value of the ownership interest in a company. Also called Common Equity or Net Worth.
Short Term Debt	Any debt incurred that is due within the accounting cycle usually one year. It is normally shown as a line item in the current liabilities portion of a company's balance sheet or in the notes associated with the financial statements.
Short Term Debt & Current Portion of Long Term Debt	Any debt incurred (both short and long term) that is due within the accounting cycle usually one year. It is normally shown as a line item in the current liabilities portion of a company's balance sheet or in the notes associated with the financial statements.
Short Term Investments	Investments of excess cash in marketable securities (money market accounts, short-term government bonds, bills, notes and commercial paper, etc.) that can be converted into cash quickly. The liquidity of these financial instruments cause them to be known as cash equivalents.
Short-Term Debt	Borrowings due within one year, including the current portion of long-term debt and revolving credit facilities.
Source of Capital	A report showing how a company finances itself through long-term debt, preferred stock, and common equity, expressed in dollar amounts and as percentages of total capital.
Stock Exchange Listings	Stock exchanges on which the company's shares are listed and traded.
Sub Industry	The classification of each company into a subordinate industry group.

T

Financial Term	Term Definition
Tangible Other Assets	Any asset not included in tangible assets such as assets from discontinued operations, franchises of a specific duration, and advances to suppliers.
Ticker	An arrangement of characters (normally alphabetical) which identify a publicly-traded company. When a company is formed and issues securities publicly, it selects a unique ticker symbol which investors and traders use for stock transactions.
Total Assets	The sum of all assets owned by a company, including current assets, property and equipment, intangibles, and other long-term assets.
Total Assets per Employee	The ratio of a company's Total Assets to the number of full-time employees. In comparison with other companies in the same sector, it is a measure of employee efficiency.
Total Capital	Long-term debt plus preferred stock plus common equity. The long-term funding base of the company.
Total Capital % of Total Assets	Calculated by dividing Total Capital by Total Assets. Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's comparative risk exposure.
Total Capital per Employee	The ratio of a company's Total Capital to the number of full-time employees. For a meaningful analysis, however, the ratio should be compared with the industry average and that of other companies in the same industry. Capital-intensive companies would have a higher ratio than labor-intensive companies.
Total Cash Flow from Operations	Funds related directly to the company's income-producing operations (net income, changes in accounts payable, accounts receivable and inventory) reported on the Cash Flow statement of the quarterly and annual reports. Depreciation, depletion, amortization, and deferred taxes are also added back to net income to derive Cash Flow from Operations.
Total Current Assets % of Net Sales or Revenues	A ratio to Net Sales or Revenues of the value of all assets that are reasonably expected to be converted into cash usually within one year. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets. This is a measure of a company's liquidity.
Total Debt % of Common Equity	A traditional financial leverage ratio determined by dividing short and long-term debt by Common Shareholders' Equity. Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure.
Total Debt % of EBIT	A traditional financial leverage ratio determined by dividing short and long-term debt by Earnings before Interest and Taxes (EBIT). Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure.
Total Debt % of EBITDA	A traditional financial leverage ratio determined by dividing short and long-term debt by Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA). Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure.
Total Debt % of Total Assets	A ratio indicating how much of the company's assets have been financed by debt, calculated by dividing Total Debt by Total Assets. Investors can identify the comparative amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze the company's risk exposure.
Total Debt % of Total Capital	A traditional financial leverage ratio determined by dividing short and long-term debt by Total Capital (long-term debt, minority interest, preferred stock and common stockholders' equity). Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure. Generally, companies who finance a greater portion of their Total Assets via debt are considered riskier than those with lower leverage ratios.
Total Debt % of Total Capital and Short Term Debt	A traditional financial leverage ratio determined by dividing Total Debt by the sum of short-term debt and Total Capital (long-term debt, minority interest, preferred stock and common stockholders' equity). Investors can identify the amount of leverage utilized by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure.
Total Debt per Employee	The ratio of a company's Total Debt to the number of full-time employees. Capital-intensive companies would have a higher ratio, however, for a meaningful analysis the ratio should be compared with the industry average and that of other companies in the same industry.
Total Equity	The capital received from investors (common shareholders, preferred stockowners and minority owners) in exchange for an interest in future earnings of the company.
Total Liabilities	All financial obligations of a company, including current liabilities and long-term debt.
Total Liabilities & Shareholders' Equity	The sum of Current Liabilities, long-term liabilities, preferred stock, minority interest if any, non-equity reserves, preferred stock and Common Shareholders' Equity.
Total Shares Outstanding	The total number of common shares currently owned by investors including restricted shares held by the company's officers and insiders. This number is usually lower than authorized or issued shares because the company has repurchased outstanding shares and holds them as treasury shares. The number of outstanding shares are recorded in the capital stock section of the liabilities side of the company's balance sheet and are used to compute book value per share and the weighted-average number of outstanding shares, the divisor in basic earnings per share and other important per share ratios.

W

Financial Term	Term Definition
Work in Process	A component of Inventory, the value of any good that is not considered to be a finished good ready for sale.
Working Capital	Current Assets minus Current Liabilities. Represents the short-term operating liquidity available to a company.
Working Capital % of Total Capital	A ratio that is calculated by dividing Working Capital (Current Assets less Current Liabilities) by Total Capital. Investors can identify the level of Working Capital relative to Total Capital by a specific company and compare it to its industry average or other companies in the same industry to help analyze and evaluate the company's risk exposure.
Working Capital per Employee	The ratio of a company's Working Capital to the number of full-time employees. The ratio is best used in comparison with the industry average and that of other companies in the same industry.
Wright Quality Analysis	The means by which the fundamental criteria for measurement of quality can be objectively evaluated. These criteria are the specific components of : (1) Investment Acceptance, (2)Financial Strength, (3) Profitability and Stability, and (4) Growth, Wright Quality Ratings are made up of three letters and a number. Each letter rating reflects a composite qualitative measurement of eight individual standards which may be summarized as A: indicating Outstanding, B: Excellent, C: Good, D: Fair, L: Limited, N: Not Rated or * Indeterminable because of instability or recent or prospective developments which cannot yet be reliably evaluated. The number is a composite of eight individual standards, measures the annual Corporate Growth Rate, and may range from 0 to as high as 20.
Wright Quality Rating	A composite quality score assigned by Wright Investors' Service, combining Investment Acceptance, Financial Strength, Profitability & Stability, and Corporate Growth components.

Y

Financial Term	Term Definition
Year to Year % Change	A number showing a percent change of a data item over two consecutive years.