Glossary Of Frequently Used Symbols in Corporate Finance

Whilst this is again not one of my more substantive posts, I thought the following glossary of frequently used symbols in corporate finance may be of some interest:

ANk Annuity factor for N years and an interest rate of k
ABCP Asset Backed Commercial Paper
ACES Advanced Computerised Execution System
ADR American Depositary Receipt
APT Arbitrage Pricing Theory
APV Adjusted Present Value
ARR Accounting Rate of Return
BIMBO Buy In Management Buy Out
BV Book Value
Capex Capital Expenditures
CAPM Capital Asset Pricing Model
CAR Cumulative Abnormal Return
CB Convertible Bond
CD Certificate of Deposit
CDO Collateralised Debt Obligation
CE Capital Employed
CFROI Cash Flow Return On Investment
COV Covariance
CVR Contingent Value Right
D Debt, net financial and banking debt
d Payout ratio
DCF Discounted Cash Flows
DDM Dividend Discount Model
DECS Debt Exchangeable for Common Stock; Dividend Enhanced Convertible Securities
DFL Degree of Financial Leverage
Div Dividend
DJ Dow Jones
DOL Degree of Operating Leverage
DPS Dividend Per Share
DR Depositary Receipt
EAT Earnings After Tax
EBIT Earnings Before Interest and Taxes
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation
EBRD European Bank for Reconstruction and Development
ECAI External Credit Assessment Institution
ECP European Commercial Paper
EGM Extraordinary General Meeting
EMTN European Medium Term Note
ENPV Expanded Net Present Value
EONIA European Over Night Index Average
EPS Earnings Per Share
EðrÞ Expected return
ESOP Employee Stock Ownership Programme
EURIBOR EURopean Inter Bank Offer Rate
EV Enterprise Value
EVA Economic Value Added
EVCA European Private Equity and Venture Capital Association
f Forward rate
F Cash flow
FA Fixed Assets
FASB Financial Accounting Standards Board
FC Fixed Costs
FCF Free Cash Flow
FCFF Free Cash Flow to Firm
FCFE Free Cash Flow to Equity
FE Financial Expenses
FIFO First In, First Out
FRA Forward Rate Agreement
g Growth rate
GAAP Generally Accepted Accounting Principles
GCE Gross Capital Employed
GCF Gross Cash Flow
GDP Global Depositary Receipt
i After-tax cost of debt
IASB International Accounting Standards Board
IFRS International Financial Reporting Standard
IPO Initial Public Offering
IRR Internal Rate of Return
IRS Interest Rate Swap
IT Income Taxes
k Cost of capital, discount rate
kD Cost of debt
kE Cost of equity
K Option strike price
KPI Key Performance Indicator
LBO Leveraged Buy Out
LBU Leveraged Build Up
L/C Letter of Credit
LIBOR London Inter Bank Offer Rate
LIFO Last In, First Out
LMBO Leveraged Management Buy Out
ln Naperian logarithm
LOI Letter Of Intent
LSP Liquid Share Partnership
LYON Liquid Yield Option Note
m Contribution margin
MM Modigliani–Miller
MOU Memorandum Of Understanding
MTN Medium Term Notes
MVA Market Value Added
n Years, periods
N Number of years
NðdÞ Cumulative standard normal distribution
NASDAQ National Association of Securities Dealers Automatic Quotation system
NAV Net Asset Value
NM Not Meaningful
NMS National Market System
NOPAT Net Operating Profit After Tax
NPV Net Present Value
NYSE New York Stock Exchange
OGM Ordinary General Meeting
OTC Over The Counter
Frequently used symbols xxiii
P price
PBO Projected Benefit Obligation
PBR Price to Book Ratio
PBT Profit Before Tax
P/E ratio Price Earnings ratio
PERCS Preferred Equity Redemption Cumulative Stock
PEPs Personal Equity Plans
POW Path Of Wealth
PRIDES Preferred Redeemable Increased Dividend Equity Security
PSR Price to Sales Ratio
P to P Public to Private
PV Present Value
PVI Present Value Index
QIB Qualified Institutional Buyer
r Rate of return, interest rate
rf Risk-free rate
rm Expected return of the market
RNAV Restated Net Asset Value
ROA Return On Assets
ROCE Return On Capital Employed
ROE Return On Equity
ROI Return On Investment
RWA Risk Weighted Assessment
S Sales
SA Standardised Approach
SEC Securities Exchange Commission
SEO Seasoned Equity Offering
SPV Special Purpose Vehicle
STEP Short Term European Paper
SV Salvage Value
t Interest rate, discount rate
T Time remaining until maturity
Tc Corporate tax rate
TCN Titres de Cre´ances Negociables
TMT Technology, Media, Telecommunications
TSR Total Shareholders Return
V Value
VAT Value Added Tax
VC Variable Cost
VD Value of Debt
VE Value of Equity
VðrÞ Variance of return
WACC Weighted Average Cost of Capital
WC Working Capital
y Yield to maturity
YTM Yield to Maturity
Z Scoring function
ZBA Zero Balance Account

I obtained the above list from the book Corporate Finance, Theory and Practice by Pierre Vernimmen, John Wiley and sons, 2005.

One thought on “Glossary Of Frequently Used Symbols in Corporate Finance”

  1. When I studied economics, albet over 35 years ago,I think Yd was the standard symbol for disposable income. Is this no longer the case??

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