Ordinary Share

Ordinary shares are shares which entitle the holders to the remaining divisible profits (and, in a liquidation, the assets) after prior interests,

What is a Share

A share is a transferable form of property, carrying rights and obligations, by which the interest of a member of a company limited by shares is measured.

Over-the-Counter (OTC)

Over-the-Counter (OTC) means the facilities provided by an exchange for the purpose of buying or selling of unlisted or delisted securities from the stock exchanges.

Preference Share

Preference shares have a fixed percentage dividend before any dividend is paid to the ordinary shareholders. As with ordinary shares a preference dividend can only be paid if sufficient distributable profits are available, although with 'cumulative' preference shares the right to an unpaid dividend is carried forward to later years. The arrears of dividend on cumulative preference shares must be paid before any dividend is paid to the ordinary shareholders.

Rights issues

A rights issue provides a way of raising new share capital by means of an offer to existing shareholders, inviting them to subscribe cash for new shares in proportion to their existing holdings.

Temporary Working Capital vs Permanent Working Capital

Temporary working capital (TWC) is the temporary fluctuation of net working capital over and above the permanent working capital.

Sources of Funds

Sourcing finance may be done for a variety of reasons. Traditional areas of need may be for capital asset acquirement - new machinery or the construction of a new building or depot. The development of new products can be enormously costly and here again capital may be required. Normally, such developments are financed internally, whereas capital for the acquisition of machinery may come from external sources.

Financial Management

Financial management is concerned with the maintenance and creation of economic value or wealth/responsibilities and activities of financial managers.