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Welcome to our Glossary section! We are very happy to see you here! This is the place where we will do our best to include as many terms from the accounting and financial world as possible so that we fully respond to your research and business needs.

Our team will constantly work on the content so that we make sure that you always stay satisfied with the information you obtain. We have sorted the terms alphabetically so that it is convenient for you to navigate through the section. In addition, we have integrated a special division dedicated to curious terms from the stock market. We hope you find them as much enjoyable as we do.

Sb Team wishes you a pleasant and fruitful navigation through our Glossary section!

Poison pill: A strategy in which the company which have received a hostile acquisition offer, rejects the buyer. The acquired companies reject their buyers with two types of poison pills: allowing the existing shareholders to buy the company’s stocks with a considerable discount or selling their shares at a much lower price after the acquisition. This makes the takeover attempt much harder and expensive.

Passive management of the investment portfolio: In this case the investor relies on a long-term rise of the shares and defines a certain investment period of, for example 6 months, a year or two, during which he does not make any changes in the portfolio’s structure. Suitable for such kind of strategies are the so called “blue chips” – companies which have a good market capitalization, have big number of investors, strong position in the economy and are included in leading stock market indexes.

Penny stock: Stocks which are traded at relatively low prices and market capitalization compared to the rest of the market. Usually these stocks are considered to be highly speculative and risky due to their low liquidity and low rating of regularly presented information. Usually these stocks are being traded on alternative, peripheral markets.

Profit/Loss: They are being calculated at a certain moment or at the end of the investment period. This is the difference between the value of the stocks in the investment portfolio at a certain moment minus the invested amount at the beginning of this period. If the result is a positive number then the investments have been profitable, and if the number is negative than the investments are at a loss. The calculated profit or loss is divided by the investment amount. The result is then multiplied by 100 and this is how we get the change in percentage – for profit with the symbol + and for loss with the symbol –.

Pig: An investment who is considered as greedy and who seems to have forgotten his initial investment strategy. These investors have very optimistic future expectations. The terms comes from the comparison between the pig which regularly overeats and the greedy investor who would not go out of an investment deal even after abrupt changes because of his expectation and belief that the change will bring him even greater profit.

Privileged asset: An asset which brings advantage to its owner – a right for a fixed dividend or liquidation value.

Prime rate: Interest rate on loans, given by the biggest banks to first class borrowers (when the risk is considered to be very low).

Price elasticity of supply: The relation between the volume of the production on the market and its market value. It is calculated as a relation between the changes in the volume of the production on the market and the changes in their market prices. It is presented in percentages.

Present discounted value: Alignment of the future to the current value, concerning the fact that the presently received amount is more valuable than the one received in the future because it would bring income in the meantime between the current and the future moment.

Purchasing power parity: The comparison between two currencies’ purchase power.

Peak: A short phase of the economic cycle, marking the highest level of GNP.

Promissory note: Unconditioned, written, legally valid obligation a certain amount of money to be paid when requested or at a certain future moment.

Personal disposable income: The personal income, corrected by the paid taxes.

Price discrimination: Selling one and the same product at different prices to different buyers.

Price competition: Intercompany competition by changing the sell prices.

Price leader: A leading company with enough market power which allows it to define the price policy on a certain market sector.

Principal: The amount of the loan, granted by the bank, without the due interest on it.

Personnel: The persons who work in a company, including people working under management and other contracts.

Practical inapplicability: Certain requirement is practically inapplicable when a certain company cannot apply it in its operations after it made all the necessary and reasonable efforts for it.

Property, machines, equipment: Material assets which are being used by the company for the purposes of production or distribution of products or services; for renting to other persons or companies or for administrative purposes. They are expected to be used for more than just one certain period of time.

Profit: Gross amount of economic benefits through a period of time derived by the company’s business activity when these benefits lead to an increase in the own capital, which increase is different from the increase of the capital by the shareholders.

Payroll: The sum total of all compensation that a business must pay to its employees for a set period of time or on a given date. Payroll is usually managed by the accounting department or provider of a business. Payroll can also refer to the list of employees of a business and the amount of compensation that is due to each of them. Payroll can differ from one pay period to another due to overtime, sick pay and other variables.

Prolongation: Extending a contract’s or an agreement’s term.

P/B (Price/Book value per share): The relation between the current price of an asset and its accounting value. The accounting value is defined when the company’s capital (the difference between the assets and the liabilities) is divided by the number of shares. The Price/Book value per share of one company is compared with these of other similar companies, as well as with its historical values.

P/S (price to sales): The relation between the current price of a share and the volume of the sales of this share (the value of the company’s income from sales divided by the number of shares in circulation).

Point of sale (POS): Point of sale, or POS as it is more commonly abbreviated, refers to the capturing of data and customer’s payment information at a physical location when goods or services are bought and sold. The POS transaction is captured using a variety of devices which include computers, cash registers, optical and bar code scanners, magnetic card readers, or any combination of these devices.

Privileged shares: Shares which depending on the rights they secure, provide more benefits or rights to their owners, a guaranteed or additional dividend, a bigger stake of the liquidation property, etc.

Percentage shares: Shares which give the right to their owners to receive a percent of the nominal value of the share, regardless whether the joint stock company has generated profit or loss, as well as dividend. This means that this type of shares provides two types of rights.

Political risk: The financial risk coming from the possibility that a certain country’s government can abruptly change its political course.

Purchase power of money: This indicator demonstrates the volume of the goods and services which can be bought or paid with one monetary unit.

Payment balance: The balance of the general turnover of goods, services and financial transactions between one party and the others. It reflects all the made payments to and from abroad. The payment balance can be current – a balance of the payments on external trading deals (trade balance), on services (international transportation, insurance, etc.), non-commercial operations (international tourism); or it can be also capital – it reflects the movements of cash (credits and investments). The payment balance is active if the currency incomes prevail and passive if the currency expenses are greater than the income.

Personal income tax: Tax paid on one’s personal income as distinct from the tax paid on the firm’s earnings. In an incorporated firm, the owners (shareholders) pay taxes on both their income (salary or dividend from the firm) and on the firm’s income (profits). In Bulgaria the personal income tax is at the flat rate of 10% which is one of the lowest within the EU.

Periphery firm: A small to medium enterprise which is in an oligopoly industry, dominated by giant corporations.
Patent: A form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention.

Pay-off: The benefit derived from a certain activity after deducting the expenses.

Pecuniary External Economy: A decrease of the average expenses of a certain company which is a result of the financial operations of other companies. An example of such event is the simultaneous initiating of several investment projects which leads to a decrease in the expenses because of the lower risk for failure of any of the projects.