Key Financial Terms and Business Practices

Key Financial Terms and Concepts

Blue Chips: Low-risk investments in reputable companies with a strong record of dividend payments.
Bull Market: A period of rising market prices.
Bear Market: A period of falling market prices.
Dividend: The portion of a company’s post-tax profits distributed to shareholders, usually expressed in pence or cents per share.
Flotation: The initial offering of a company’s shares on the market.
Portfolio: The collection of securities owned by an individual or financial institution.
Par Value/Face Value: The nominal value of a security, as printed on the share certificate.
Unit Trust: An investment fund designed for the general public.

Letter of Credit: A payment method where the buyer’s bank guarantees payment to the seller upon presentation of specified documents.
Bill of Exchange: A written order from an exporter instructing an importer to pay a specific amount at a specific time.

Securities: A general term for stocks and shares offered by companies to raise capital. In common usage, stocks refer to fixed-interest securities, while shares represent the remaining types.
Shares/Equities: Units representing ownership in a company.
Government Stocks/Gilt-Edged: Loans issued by the government to finance its spending.
Debentures: Loans to a company that yield a fixed interest rate.
Shareholders/Stockholders: Owners of shares, thus owners of the company, with voting rights at the annual general meeting. Shareholders are entitled to dividends if the company makes a profit.

Indexes: Indicators of share/stock price levels relative to previous periods.
NASDAQ: A stock market specializing in smaller and newer companies.
Listed or Quoted Company: A company whose shares are traded on the stock exchange.
Stock Broker: An individual or organization that buys and sells securities on behalf of clients, providing advice and dealing services.
Investment Trusts: Companies that specialize in buying, selling, and holding shares.

DDP (Delivered Duty Paid): When BSH exported dishwashers, they paid all costs up to the importer’s premises.
EXW (Ex Works): When Motorcenter.Inc imported motorbikes, they handled all transportation and insurance costs.
FOB (Free On Board): When Milco exported cloth to New York, they covered transportation costs until the goods were loaded onto the ship. The importer arranged sea freight and other payments.
CFR (Cost and Freight): When JLN imported goods, they didn’t arrange transportation until the goods reached the arrival port but paid the insurance premium themselves.
CIF (Cost, Insurance, and Freight): When FSX exported goods, they covered all transportation costs until the goods reached the arrival port, including insurance.
FCA (Free Carrier): When GM exported cars, they paid for the cars to be loaded onto a train, but no further.
FAS (Free Alongside Ship): When Moore imported shoes, they had to arrange and pay all costs from the departure port, including loading the goods onto the ship.

Our competitors are expensive. → I’m afraid our competitors aren’t very cheap.
There’s a problem with that. → I think there’s a bit of a problem with that.
It’ll be better to use Air Express. → Wouldn’t it be better to use Air Express?
We can’t do that. → To be honest, I’m not sure we could do that.
There’s a misunderstanding. → There seems to be a slight misunderstanding.
That’s going to be difficult. → I guess that could be a little difficult.
That gives us very little time. → Actually, that doesn’t give us very much time.
The transport costs are expensive. → The transport costs are a bit expensive, aren’t they?

Product X is very expensive. → To be honest, product X seems a bit expensive.
It’s more expensive than product Y, but it’s much better. → It’s a little more expensive than product Y, but the quality is better.
If we buy product X, what terms will you give us? → If we bought product X, what terms could you give us?
What do you mean? → To be honest, I don’t know what you are talking about. Could you be more specific?
Can we have more credit? → Could you give us a higher credit limit?
That will be difficult. You’re over your limit. → I’m afraid it would be impossible; actually, your limit is over.
We have a problem with our cash flow. → To be honest, I’m not sure we could pay on the fifth; we have a bit of a problem.
Pay some of the money you owe us. → As a matter of fact, it would be good if you could make the payment.
OK. → Well, I’ll do it. / Well, we could.
In that case, we’ll be more flexible. → I think we could be more flexible.

Prompt Payment Discount: A reduction for prepayment or payment soon after delivery.
Quantity Discount: A reduction for purchasing large quantities.
Promotional Discount: A reduction to help launch a new product.
Delivery Time: The duration for goods to arrive.
Exclusivity: Sole rights within a specific geographical area.
Terms of Payment: Financial conditions of a sale.
Minimum Order: The smallest quantity that can be supplied.
Guarantee/Warranty: A promise of quality or that defects will be repaired.
Length of Contract: The duration of the business agreement.
Transport Costs: The cost of delivery.
Penalty for Late Delivery: An extra discount if goods arrive late.
Procedure: The correct way of doing something.

I want your latest catalog. → Could you please send me your latest catalog? I would be grateful if you could send it to me.
Give some information about the forthcoming conference. → I would appreciate it if you could give me some information about…
I want to meet you on June 24th. → Could we possibly meet on June 24th?
I need the invoice before the end of next week. → Could you please send me the invoice before the end of next week?
Tell me more about your EasiLux furniture range. → I would like for you to tell me more about your EasiLux furniture range, if possible.
I want to receive some samples of your products. → I would like to receive some samples of your products if it’s not an inconvenience.