MarketsBasics
How Does the Stock Exchange Work?
From order to settlement: how prices are formed on the stock exchange, who trades there and why exchanges matter for companies and savers.
Section
Markets
Shares, indices, company figures, market mechanics
This is about companies and market moves: how the stock exchange works, how to read a balance sheet and why prices sometimes move differently from the news. Basics that make every headline easier to understand.
MarketsBasics
How to Read a Company Balance Sheet
Assets, liabilities, equity ratio: how to see in a few steps how soundly a company is financed.
MarketsFocus
Why Share Prices Can Fall Despite Good News
Record profits, and the share slips: why markets trade expectations rather than headlines, and how to put such moves into context.
Do the maths
Business Glossary
The terms from business, finance, markets and crypto, explained briefly and clearly.
Business glossary
Terms from Markets
- Ad hoc announcement
- Mandatory disclosure (Ad-hoc-Mitteilung) under Article 17 of the EU Market Abuse Regulation, by which an issuer makes inside information that directly concerns it public without delay.
- Balance sheet date
- Day to which a balance sheet refers, often 31 December. The balance sheet shows a company’s assets and financing at exactly this point in time.
- Bid-ask spread
- Difference between the best buy offer (bid) and the best sell offer (ask) for a security, often simply called the spread.
- Central counterparty
- Entity that steps in between buyer and seller in an exchange transaction and takes on the risk that one side fails to meet its obligations.
- Central securities depository
- Institution that records securities centrally and settles the delivery of securities against cash between the banks involved.
- Consensus estimate
- Average of analysts’ estimates for a figure such as revenue or earnings per share before it is published.
- Equity ratio
- Equity as a percentage of the balance sheet total, a measure of a company’s financial independence.
- Fixed asset coverage
- Ratio showing the extent to which fixed assets are financed by equity, or additionally by long-term debt capital (Anlagendeckung in German).
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