Management Buy-In (MBI): Acquiring of a certain company by an external management body. Usually in such cases, the new management changes the old one entirely. This kind of acquisitions usually happens when the bought company is underestimated or when the management body is facing problems and difficulties.
Management Buyout (MBO): Acquiring a company by its own management.
Macaroni defense: A type of defense which a certain company uses in order to protect itself from a potential hostile acquisition. The company undertakes a considerable bond issue with the condition to be paid by the company’s buyer. The term comes from the considerable swelling of the macaroni when they are boiling and it represents the significant growth in the prices of bonds in case of acquisition.
Market Maker: An investment broker or bank who have the responsibility to keep up offers for selling or buying of securities as they are ready to buy or sell at market prices. By doing this they are keeping the liquidity of certain stocks high. The brokers should distinguish the market making business from their broker services for their business clients in order to avoid a situation in which they recommend certain stocks only because they are their market makers.
Market capitalization: The price of a share multiplied by the number of the ordinary assets issued.
Margin: Usually this terms is related to trading by using loan funding. In practice, a certain investor is trading with loan funds from his broker and this way he can buy more stocks than if he uses only his own financial funding. For this kind of trading a special margin account is opened, different from the common account at the broker. For opening such account usually there is a requirement for a certain level of possessed funds. Traditionally such kind of trading is considered as a highly risky and it is not recommended for inexperienced investors.
Management of the investment portfolio: Coming up with an investment strategy mainly depends on the strategic aims of the investor, his level of tolerance towards risk and his future needs for capital. In order to form an investment strategy it is necessary to have a certain amount of financial assets – stocks, debentures, currency, etc. In order to put it simple, the strategies can be two types: passive and active.
Mutual Fund: A financial institution, gaining capital by selling its own stocks and at the same time making large investments in diversified portfolio of securities. By doing this this fund lowers the risk and at the same time decreases the management costs.
Mutually beneficial preferences: An agreement between two or more than two countries for mutually beneficial trading. The advantage of it is usually related to the decrease in the import duties.
Mutual saving bank: Savings institutions, taking deposits against interest rate. At first the assets have been formed through mortgages.
Monetized debt: The part of the budget deficit which directly or indirectly is being financed by the Central bank.
Monopsony: The mirror reflection of the monopoly which is regarding the consumption. Usually the monopsony is coming from one buyer.
Moral hazard: A case of information asymmetry when after a financial transaction is finished a partner may do unwanted by the other partner of the deal activities.
Multinational corporation: Big companies, related to an intense trans boarders movements of production factors with the purpose of meeting the interests and the business objectives of the private business in the developed countries. They run more than the half of the world industrial production and the international goods exchange.
Municipal securities: Issued by local authorities bonds (debentures) which are usually released from income tax duties.
Maturity date: The date on which a loan becomes executable. A payment of a certain amount is done after presenting the required documentation and the loan is considered cleared off.
Market power concentration: A degree of the market monopolization. It refers to the market share either of a single firm or a bunch of firms. In some market sectors, such as the trading with cars or metallurgical products there is a high degree of market power concentration.
Market conjuncture: A current characteristics of the market conditions, including inflation, unemployment, solvent demand, competition, tax system, interest rates, phases of the economic cycle, etc.
Money supply: The quantity of all functioning as money means, measured by different factors. The money supply consists of coins, bank-notes and checks.
Market basket of consumer: A bunch of goods needed for the satisfaction of the basic of the social needs of the population. It includes hundreds of types of the most necessary and preferred by the people goods and services, distributed in basic groups: food, fuel, transport services, medical services, etc.
Marginal revenue: A change into the total income as a result of additionally sold product unit.
Method of amortization: The method by which the amortization extent is being defined through the accounting periods within the expiry date of the amortized asset. The methods of amortization can be either linear or non-linear.
Mother company: A mother company is any company which owns a smaller or “subsidiary” company. The mother company may be simply a company that owns companies without actually producing a product in and of itself or the company may produce a general product while leaving specialization to a subsidiary or the mother company may simply have merged with a totally unrelated company.
Management bodies: The managing, controlling and supervisory bodies of the company.
Monetary financial tool: Financial tool which is going to be received or paid as a fixed or determinable cash amount.
Mistakes for past periods: Gaps or incorrect presentation of the financial statements of the company for one or more than one past periods derived from not using or incorrect using reliable information which has been present at the moment of the confirmation for the publication of the financial statements. If this information was not present, then it could have been obtained and taken into consideration when preparing and presenting of the financial statements. These mistakes include the results of the mathematical mistakes, mistakes coming from the application of the accounting policy, oversight or incorrect representation of facts.
Mortgage: A real estate pledged as a compensation for a bank loan which value should cover the amount of the principal and the interest of the loan.
Margin: In a general business context, margin is the difference between a product’s (or service’s) selling price and the cost for its production.
Market makers: Firms which buy and sell shares on their own behalf realizing profit from the difference between the selling and the buying price. There are market makers on the currency market as well where the leading role is being played by the trade banks which define the buying and the selling rate.
Memorial order: An accounting document, through which on the grounds of primary documents, the trading deals and the related to them bank transactions are being chronologically recorded.
Market risk: The day-to-day potential for an investor to experience losses from fluctuations in securities prices.
Market share: The sells volume of a certain company, represented as a percentage of the total sells in the sector.
Market capitalization: The value of the stocks of a certain public company at a certain moment. It is calculated when the number of the issued stocks is multiplied with their current market price.
Market order: An order for purchase or sale of a certain financial asset at a market price.
Market price: The amount at which a certain asset can be sold in a direct deal between informed, independent and willing to conclude the deal buyer and seller.
Moonlighting: This is a term for working on two places, as one of the jobs secures the main income and the other – the additional. This practice is widely spread across certain economy sectors with low level of remuneration.
Multistage tax: A tax which is levied on every step of the production. These are the Value-Added Tax and the Income Tax.
Multinational cooperation: International company which produces goods and services in several countries, without her main production to be focused in one country.
Malleable capital: Available goods, which can be instantly and at no extra cost be converted in another form.
Merger: The merger between two or more than two companies in one new company. The merger can be done between companies which are at different levels of the production or the distribution of a certain good or it can be between companies which are at the same production level. The first case is called vertical merger and the second – horizontal. The merger into conglomerate means a merger of companies with different scope of activity. Usually mergers happen in stages, mainly in times of economic crisis, because they are considered as a mean for cutting costs.
Merit good: A good which is is secured by the government since its consumption is considered beneficial and helpful for the society as a whole. Good examples are education and libraries. It is believed that the expenses encountered for such goods and services are completely justified due to their positive effect over the society.
M-form: A corporation with a lot of divisions which is organized in a way that the production department is separated from the strategic decisions one.
Monkey: Five hundred units of one currency, for example the dollar or the British pound.
Mixed credit: A combination of a credit granted by a financial institution with an ordinary trading interest rate and a credit granted against preferential conditions.
Money at call: The most liquid bank assets after the cash. These means can be instantly sent by the monetary market to which they are granted as a loan.
Mobility of labour: Transferring part of the work force to different regions, between different production spheres or between different occupations. The main barriers in front of the labour mobility are the expenses encountered for obtaining information and for conduction researches.
Monetary inflation: Inflation caused by an increase in the monetary supply.
Minimum reserve requirements: A form of a currency control which aims to decrease the possible effect over the liquidity of the local currency caused by the entrance of foreign currency on the monetary market.
Money income: The income represented with money according to the current prices as of the moment of receiving the income; nominal income.
Management accounting: A financial assessment of the past, current and future activities of the company. It includes budget of the cash availability, budget of the capital (assessment of the investment plans) and the transfer prices. The management accounting is also entitled to observe the development of the current accounting systems, to prevent frauds and to respond to the growing needs of the management bodies for information. It is progressing on the base of the increasing number of problems in the big companies.
Management by objectives: Placing of exactly defined tasks to every level of the management which is relatively independent. With applying management by objectives the individual activity of every level can be observed and assessed.
Market adjustment: The changes in prices and quantities which are being caused by changes in the market demand and supply.
Market concentration: The concentration of sales made by the biggest companies on a certain market or industry.
Market share: The relation between the sales of a certain producer or trader and the total volume of the sales realized in a certain industry or sector.