Glossary

911 terms from the Key-terms tables of every lesson and case study, A–Z. Each entry gives a plain-English definition and the lessons where the term is taught (click the code). Where two lessons define a term from different angles, both definitions are shown.

The glossary is generated by tools/build_glossary.py, which also writes the Anki deck in flashcards/. To change an entry, edit the lesson's Key terms and re-run the script. Formulas are collected on the formula sheet; Indian conventions (lakh, crore, FY) are in Indian numbering & conventions.

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0–9

Term	Meaning	Taught in
10-K / 10-Q / 8-K	US annual report / quarterly report / current report on a material event	03.5
13F	Quarterly holdings report of US institutional managers above $100m	03.5
20-F / 6-K	Annual report / interim report of a foreign private issuer listed in the US	03.5

A

Term	Meaning	Taught in
Absorption	Allocation of fixed production costs into inventory	09.3
Acceptance ratio	Fraction of shares tendered that the company actually buys · Also: Shares accepted ÷ shares tendered	01.3, 12.3
Accounting equation	Assets = Liabilities + Equity; holds after every transaction	02.1
Accretive / dilutive	Raises / lowers a per-share measure (EPS, BVPS or value per share — say which)	01.3
Accrual	An expense or revenue recognised before the related cash moves (e.g., bonus accrued) · Also: The non-cash component of profit; PAT − CFO (cash-flow view) or the change in net operating assets (balance-sheet view)	02.6, 04.7
Accrual basis	Recognising revenue when earned and expenses when incurred, whenever cash moves	02.2
Accruals anomaly (Sloan)	High-accrual companies subsequently show lower earnings persistence and stock returns	04.7
Accruals (as a signal)	The gap between accrual profit and operating cash flow	02.2
Active reading	Reading with prediction, computation and recall, not passive re-reading	00.2
Adjust / discount / monitor / escalate	The four responses to forensic findings	09.7
Adjusted beta	Regression beta shrunk toward 1 (0.67β + 0.33)	06.2
Adjusted EBITDA	Company-defined EBITDA excluding ESOP and "one-time" costs; rebuild before use	07.4
Adjusted EPS	EPS excluding exceptional items, after tax · Also: EPS excluding items judged non-recurring, after tax; your own construction unless disclosed in the notes	04.1, 04.6
Adjusting / non-adjusting event	Post-year-end event that changes the numbers / is only disclosed (Ind AS 10)	03.3
ADV	Average daily traded value	11.4
Ageing schedule	Breakdown of receivables (or CWIP) by how long outstanding · Also: Breakdown of receivables by time outstanding	04.7, 09.2
Agency problem	Conflict of interest between a principal and the agent acting for them	01.1
Aggregator	A site that collects and re-formats company data (Screener.in, Trendlyne, etc.); fast but not authoritative · Also: A service that standardises filings into tables (Screener, Tijori, Trendlyne, Tikr) — derived, not primary, data	00.2, 03.1
Aggressive accounting	Estimates and policies chosen at the profit-flattering end of the acceptable range	09.1
AGM / EGM	Annual / extraordinary general meeting of shareholders	01.1
AGR	Adjusted gross revenue — the base for telecom licence fees; the 2019 Supreme Court ruling created large dues	07.6
Allowed RoE	The regulator-set return (CERC 2024–29: 15.5% thermal, 15% transmission)	07.6
ALM	Asset-liability management: maturity matching of loans and funding	07.1
ALMM	Approved List of Models and Manufacturers for solar modules used in government-backed projects · Also: Approved List of Models and Manufacturers, MNRE's list of eligible solar modules (and now cells) for government-linked projects	05.2, 05.4
Alpha / tracking error / information ratio	Excess return over the benchmark / its standard deviation / their ratio, the standard measure of active skill	00.1
Alternative data	Non-traditional data (web, app, satellite, job postings) used to infer business activity	05.7
Altman Z-score	Five-ratio discriminant model of bankruptcy risk; safe above 2.99 (original)	09.6
Anchoring	Over-reliance on an initial reference number	11.6
Anchor investor	Large institution allotted shares the day before an IPO opens, subject to lock-in · Also: An institution allotted shares before the issue opens; locked in 30 days (50%) and 90 days (50%)	01.3, 03.5
Anki	Free flashcard software that schedules spaced repetition; the course glossary is mirrored as a deck in flashcards/	00.2
Annotation (F/J/G/R)	Marking each claim as a verifiable Fact, management Judgement, Green flag or Red flag	03.6
Annuity / EMI	A finite level stream: \(PV = C[1-(1+r)^{-n}]/r\). An EMI is the annuity payment that repays a loan	01.5
Anti-dilutive	A potential share whose inclusion would raise EPS; excluded from reported diluted EPS	01.2
AOC-1	The annual-report form summarising each subsidiary, associate and JV · Also: Form summarising each subsidiary's, associate's and JV's key financials	02.8, 03.2
AOC-1 / AOC-2	Companies Act forms listing subsidiaries' financials / non-arm's-length RPTs	05.6
AOC-2	Form listing related-party contracts (not at arm's length; material at arm's length)	03.2
APE	Annualised premium equivalent: regular premium + 10% of single premium	07.2
Append-only record	A casebook in which past decisions are never edited, only followed by new dated entries	15.1
Appraisal value	EV + value of future new business	07.2
Arm's length	Terms equivalent to those with an unrelated party — asserted by the company, to be tested by you	05.6
ARPU	Average revenue per user · Also: Average revenue per user per month	05.1, 07.6
ASM / GSM	Exchange surveillance frameworks that restrict trading in suspect stocks	05.6
ASM / GSM / ESM	Exchange surveillance frameworks imposing higher margins, tighter bands, trade-for-trade settlement or call auctions · Also: Exchange surveillance frameworks restricting trading in flagged stocks	01.4, 09.5
ASP	Average selling price = revenue ÷ units; moves with both price and mix	04.1
Asset	Present economic resource controlled by the company as a result of past events	02.1
Asset turnover	Revenue ÷ average total assets; capital intensity's inverse	04.3
Asset-turnover (capacity) method	Growth capex = revenue beyond existing capacity ÷ turnover of new capacity; zero while there is spare capacity	04.4
Associate	A company over which another has significant influence (presumed at ≥20% votes); equity-accounted	01.1
Assumptions	The fi.model dataclass holding every forecast driver	10.5
Auditor resignation disclosure	LODR/SEBI 2019 requirement: detailed reasons, within 24 hours	09.5
Audit trail (Rule 11(g))	Auditor's report on whether the accounting software kept a non-disableable edit log (from FY24)	03.2
Authorised / paid-up capital	Legal ceiling on share capital / the amount actually paid on issued shares	01.1
Averaging down	Buying more after a fall — justified only with the thesis intact	11.5

B

Term	Meaning	Taught in
Balance check	Total assets − (total liabilities + equity); must be zero	02.6
Balance confirmation	A request to a counterparty to confirm the balance owed; response rates are a quality signal	03.6
Balance sheet	Snapshot of assets, liabilities and equity at a date; Assets = Liabilities + Equity	02.4
Balancing figure (Q4)	Q4 results derived as audited full year minus nine-month YTD; absorbs year-end adjustments.	03.4
Balancing item	Cash (or revolver) — the line that makes the balance sheet balance	10.3
Base effect	Growth caused by an abnormal comparison period rather than by the current one	04.1
Base rate	How often an outcome happens in the relevant reference class; the starting point before case-specific evidence	00.1
Base rate / outside view	The distribution of outcomes for a reference class, used to anchor a forecast	11.6
Basic / diluted EPS	PAT to owners ÷ weighted shares; diluted adds shares from options/convertibles	02.3
Basic EPS	PAT attributable to owners ÷ weighted-average shares outstanding (Ind AS 33)	04.6
Basis for Issue Price	The offer-document section justifying the price with KPIs, peers and past transaction prices	03.5
Beat / miss / surprise	Actual above / below consensus; surprise = actual ÷ consensus − 1.	03.4
Beneish AQI / DEPI / SGAI	Asset-quality, depreciation and SG&A indices	09.3
Beneish M-score	Eight-index logistic model of earnings-manipulation probability; flag above −1.78	09.6
Beta	Sensitivity of a stock's returns to the market's; systematic risk	06.2
Beta-weighted hedge	Index futures sized by the position's beta	11.7
Big bath	Loading every possible charge into one bad year · Also: Concentrating charges into one bad period so future periods look better	04.7, 09.1
Bill-and-hold	Customer invoiced but goods kept by the seller; revenue only if strict criteria are met · Also: Invoicing goods that have not been delivered	02.2, 09.2
Bills discounted	Receivables (bills) financed by a bank; contingent liability if with recourse	09.4
Block deal	A single trade of at least ₹25 Cr in a dedicated window at within ±3% of a reference price	01.4
Board of directors	Governing body elected by shareholders; appoints and oversees management	01.1
Board's (Directors') report	Statutory report of the board under Sec 134(3), with annexures (AOC-1, AOC-2, CSR, remuneration, MR-3)	03.2
Bonus issue	Free shares issued by capitalising reserves	01.3
Book-to-bill	Orders received ÷ revenue executed; above 1 means the order book is growing	04.1
Book value per share	Total equity ÷ number of shares · Also: Equity attributable to owners ÷ shares outstanding	01.1, 02.4
Bottom-up (unlevered/relevered) beta	Peer-average business beta, re-levered for the company's D/E	06.2
Branding	Willingness to pay a premium for an objectively equivalent product, built over time	05.3
Breadth	Share of stocks participating in a move	12.2
Break-even revenue	Fixed costs ÷ contribution margin	04.2
Break-even solve	Finding the input value that makes model value equal a target (Goal Seek / reverse DCF)	10.4
Brier score	Mean squared error of probabilistic forecasts; 0 is perfect, 0.25 is always-50%	15.1
BRSR / BRSR Core	Sustainability report for the top 1,000 listed companies; the Core subset gets third-party assessment or assurance on a glide path	03.2
Bulk deal	A client's trades in one stock on one day exceeding 0.5% of listed shares. Published the same evening	01.4
Bulk deal / block deal	Bulk: a client's trades in a day >0.5% of listed shares; block: a negotiated trade in a special window (minimum ₹25 Cr since Dec-2025)	03.1
Burn / runway	Cash consumed per period / periods of cash remaining	07.4
Business model	How a company creates, delivers and captures value — who pays, for what, and what it keeps	05.1
Buyback (tender / open market)	Company repurchases and extinguishes its shares, proportionately at a fixed price / on the exchange over time	01.3
Buyback yield	Cash spent on buybacks ÷ market cap	04.6
BVPS	Equity attributable to owners ÷ period-end shares	01.2
BVPS / tangible BVPS	Owners' equity ÷ shares; tangible also deducts goodwill and intangibles	04.6

C

Term	Meaning	Taught in
CAC	Customer acquisition cost: sales & marketing spend ÷ new customers acquired	05.1
CAC / LTV	Customer acquisition cost / lifetime value	07.4
CAGR	Constant annual rate linking a start and end value: \((V_n/V_0)^{1/n} - 1\) · Also: Compound annual growth rate: \((V_{\text{end}}/V_{\text{start}})^{1/n}-1\)	01.5, 04.1
Calibration	The match between stated confidence and realised frequency · Also: Agreement between the probabilities you state and the frequencies that follow	11.6, 15.1
Calibration buckets	Forecasts grouped by stated probability, with the hit rate compared to the probability	15.4
Capacity tracker	Project-by-project table of announced additions, graded by status, used to forecast utilisation	05.4
Capacity utilisation	Actual output ÷ installed capacity; the key state variable for capital-heavy businesses	05.4
Capex intensity	Capex ÷ revenue; capex ÷ (depreciation + intangible amortisation)	04.4
Capex schedule	Forecast of capital expenditure and the resulting fixed-asset and depreciation roll	10.3
Capital advances	Payments to suppliers for assets not yet delivered · Also: Payment to a vendor for a fixed asset not yet received	09.3, 09.4
Capital allocation	The deployment of a company's cash among reinvestment, acquisitions, dividends, buybacks and debt repayment	05.5
Capital creditors	Amounts owed for capex already received; investing-related, not working capital	02.6
Capital cycle	The loop in which high returns attract capacity, capacity depresses returns, and low returns drive capacity out again	05.4
Capital-cycle analysis	Investment approach (associated with Marathon Asset Management) that focuses on industry supply rather than demand	05.4
Capital employed	Equity + all borrowings + lease liabilities (the sources view)	04.3
Capital intensity of growth	Extra invested capital needed per ₹ of extra revenue	04.1
Capitalisation	Recording an outlay as an asset rather than an expense	04.7, 09.3
Capitalise	Record a cost as an asset to be expensed over time (e.g. through depreciation) rather than immediately · Also: Record a cost as an asset on the balance sheet rather than as an expense, then expense it over time	02.1, 02.7
Cap rate	Net operating income ÷ property value	07.6
CARO 2020	Companies (Auditor's Report) Order: 21 clause checklist reported by the auditor on standalone statements	03.2
CARO (ii)(b) remark	Auditor's statement on whether quarterly stock/receivable returns filed with banks agree with the books	03.6
Carve-out	A deliberate departure in Ind AS from the corresponding IFRS	02.9
CASA	Current + savings account deposits; a bank's low-cost funding base	07.1
Case-file rubric	Eight weighted criteria scoring the written case; 70 is the bar for acting	15.4
Cash as a position	Holding cash deliberately as optionality and buffer	11.4
Cash basis	Recognising revenue and expenses only when cash is received or paid	02.2
Cash check	Closing cash per the cash-flow statement = cash on the balance sheet	02.6
Cash conversion cycle (CCC)	DIO + DSO − DPO: days the company's own cash is tied up per sale · Also: DIO + DSO − DPO: days of the company's own money tied up per sale	00.2, 04.4
Cash cost	Cost per unit excluding depreciation and financing	07.3
Cash EPS	(PAT + D&A) ÷ shares; ignores capex and working capital. Not a cash measure	04.6
Cash equivalents	Highly liquid investments with original maturity ≤3 months · Also: Short-term, highly liquid investments with insignificant risk, typically ≤3-month original maturity	02.4, 02.5
Cash-flow hedge reserve	OCI balance holding the effective portion of hedges of future cash flows until they hit P&L	02.8
Cash-flow statement (CFS)	Statement of cash inflows and outflows in a period, split into operating, investing and financing	02.5
Cash-generating unit (CGU)	Smallest group of assets generating largely independent cash inflows	02.7
Cash-secured put	Selling a put with cash reserved to buy the shares if assigned	11.7
Catalyst	A dated event likely to reveal information that moves price towards value · Also: A dated event expected to move price toward value	00.3, 11.3
Catalyst / thesis-breaker	The event expected to close the gap between price and value / the evidence that would prove the thesis wrong	00.1
CEA / TRAI / DGCA	Central Electricity Authority / telecom regulator / aviation regulator — sources of sector data	05.7
CECL	US GAAP's current expected credit loss model: lifetime losses from day one	02.9
CFF	Cash flow from financing activities — borrowings, repayments, interest paid, dividends, share issues, lease payments	02.5
CFI	Cash flow from investing activities — capex, investments, acquisitions, (for non-lenders) interest/dividends received	02.5
CFO	Cash flow from operating activities — cash generated by the business	02.5
CFO / CFI / CFF	Cash flow from operating / investing / financing activities	09.4
CFO/EBITDA, CFO/PAT	Cash-conversion ratios; judge over several years and against expected conversion	04.4
Change in accounting estimate	A revision (e.g., useful life) applied prospectively without restating prior years (Ind AS 8)	02.7
Change in estimate	A revision of an assumption (useful life, ECL rate) applied prospectively, without restating prior years	03.3
Change in inventories	(Opening − closing) finished goods/WIP; negative when stock is built, reducing expense	02.3
Channel check	Asking dealers/distributors about sell-through, inventory and competition	05.7
Channel financing	Bank lending to dealers to buy the company's goods, often guaranteed by the company	09.4
Channel inventory	Stock held by dealers/distributors; a leading indicator of future sell-in	05.7
Channel stuffing	Pushing excess stock into distribution before period-end to inflate revenue · Also: Pushing excess product into distribution to book sales early	02.2, 09.2
Check	A formula that must evaluate to zero/true if the model is consistent	10.1
Churn / retention	Share of customers lost / kept per period	05.1
Circle of competence	The businesses you understand well enough to forecast; grows with study · Also: The businesses you understand well enough to know when you are wrong	00.3, 11.1
Circularity	A loop in a model (interest ↔ debt ↔ cash) that needs iteration or an opening-balance convention · Also: A formula that depends (directly or indirectly) on itself, e.g. interest on average debt where debt depends on cash which depends on interest	02.6, 10.1, 10.3
Circularity switch	An input that zeroes the self-referential term so an Excel model can be reset	10.4
Clean surplus	The property that all non-owner changes in equity pass through the income statement	02.1
Clean-surplus accounting	All gains/losses pass through profit, so \(B_t = B_{t−1} + \text{PAT}_t − \text{Div}_t\)	06.7
Clearing corporation / novation	The entity that becomes counterparty to both sides of every exchange trade and guarantees settlement	01.4
Closing entries	Year-end entries transferring revenue and expense balances into retained earnings	02.1
Cobweb model	Model in which supply responds to last period's price; oscillates when supply is very price-sensitive	05.4
Coffee-can investing	Buying consistent compounders and holding for a decade	11.1
Cohort analysis	Tracking a group of customers acquired in the same period over time (retention, spend) · Also: Retention and spend of customers grouped by acquisition period	05.1, 07.4
Collar	Long put + short call around a long stock position	11.7
Collections	Cash received from customers during a period	07.6
Colour coding	Blue inputs, black formulas, green links, red checks	10.1
Combined ratio	Claims ratio + expense ratio for a general insurer; < 100% = underwriting profit	07.2
Commercial paper (CP)	Unsecured, rated short-term (≤1 year) money-market borrowing · Also: Unsecured short-term (up to one year) debt instrument that must be rolled over	01.3, 04.5
Common-control combination	Combination of entities controlled by the same party; accounted for by pooling at book values (Ind AS 103 App. C)	02.8
Common-size statement	Every line expressed as a percentage of revenue · Also: Each P&L line expressed as a percentage of revenue	02.3, 04.2
Competition (reference-group) neglect	Planning expansion as if rivals will not expand too	05.4
Competitive-advantage period (CAP)	The number of years a company is expected to earn returns above its cost of capital	05.3
Completion method	Revenue recognised when control transfers (Ind AS 115 for Indian developers)	07.6
Component accounting	Depreciating significant parts of an asset separately over their own lives	02.7
Compounding	Earning returns on previous returns: \(FV = PV(1+r)^n\)	01.5
Concentration	Number and weight of positions	11.4
Confirmation bias	Seeking and over-weighting evidence that supports an existing belief	11.6
Conglomerate discount	Below-sum valuation of a multi-business operating company · Also: Below-SOTP valuation of a multi-business operating company	06.7, 07.5
Connected entities	Shareholders or counterparties that act in concert with promoters, often classified as public	09.5
Consensus	The mean or median of published analysts' forecasts for a metric. · Also: The average of published analyst forecasts; not the same as price-implied expectations	03.4, 06.6
Consignment	Goods placed with a dealer who has not bought them; no revenue until onward sale	02.2
Consolidated / standalone	Group vs parent-only statements	10.2
Consolidation	The process by which share moves to fewer, larger players	05.2
Constant currency (CC)	Current-period revenue restated at prior-period exchange rates	04.1
Constraint	Include variable consideration only if a significant reversal is highly improbable	02.2
Contingent liability	Possible obligation disclosed in notes but not recognised · Also: A possible obligation, or one not probable or measurable, disclosed in notes but not recognised	02.4, 02.8, 04.5
Contract asset (unbilled revenue)	Right to consideration for work done that is conditional on something other than time · Also: Revenue recognised but not yet billable (Ind AS 115)	02.2, 03.3
Contract liability	Consideration received before performance — advances, deferred revenue	03.3
Contract liability (advance from customers)	Cash received for goods or services not yet delivered	02.1
Contract liability / deferred revenue	Cash received before revenue is earned	09.2
Contract liability (deferred revenue, advance from customers)	Consideration received or due before the company performs	02.2
Contractual service margin (CSM)	Under Ind AS 117 / IFRS 17, the unearned profit on insurance contracts, released over coverage	02.9
Contribution margin	(Revenue − variable costs) ÷ revenue; the profit on each incremental unit before fixed costs · Also: Revenue minus variable costs of serving a unit, before fixed overheads	04.2, 07.4
Contribution per order / unit	Contribution ÷ units; the variable that decides break-even	07.4
Contribution per unit	Price − variable costs per unit	05.1
Contribution to growth	A segment's revenue change ÷ total prior-year revenue, in percentage points	04.1
Control	Power over an investee, exposure to its variable returns, and the ability to use that power to affect them (Ind AS 110)	02.8
Convertible	Debt or preference capital that converts (compulsorily or optionally) into equity	01.2
Cookie jar / big bath	Over-provisioning for later release / concentrating charges in one period	09.3
Cookie-jar reserve	Over-provisioning in good years to release in bad ones · Also: Over-provisioning in good periods to release into profit later	04.7, 09.1
Core CFI	Capex and acquisitions, excluding treasury buying/selling of liquid investments	02.5
Cornered resource	Exclusive access to a valuable input (patent, lease, licence, location)	05.3
Corporate-governance report	LODR Schedule V Part C disclosure on board, committees, auditor fees, director resignations	03.2
Corporate guarantee	The company's promise to pay another entity's debt if it defaults · Also: A company's promise to cover another entity's debt	04.5, 05.6
Cost build	Line-by-line forecast of costs from drivers (margins, fixed/variable, per unit)	10.3
Cost curve	Industry producers ranked by unit cash cost; sets the marginal price	07.3
Cost of capital	Return investors could earn on alternatives of equivalent risk; the discount rate	06.2
Cost of debt (\(k_d\))	Current long-term borrowing rate; after tax, \(k_d(1 − t)\)	06.2
Cost of equity (\(k_e\))	Return equity investors require; by CAPM, \(r_f + \beta \times \text{ERP}\)	06.2
Cost of materials consumed	Raw materials used in the period = opening stock + purchases − closing stock	02.3
Cost-to-income	Operating expenses ÷ (NII + fees)	07.1
Counter-positioning	A business model that incumbents cannot copy without harming their existing business	05.3
Country risk premium	Extra premium for a country's sovereign/market risk, added to a mature-market ERP	06.2
Covenant	Lender-imposed condition (e.g., net debt/EBITDA ≤ 2.0x) whose breach allows the lender to act · Also: A contractual financial test in a loan agreement; breach allows lenders to demand repayment	03.3, 04.5
Covered call	Selling a call against shares held	11.7
Cover ratio / invocation	Collateral value ÷ loan. Invocation is the lender selling pledged shares when cover is breached	01.4
CRAR / Tier-1 / CET-1	Capital adequacy ratios against risk-weighted assets	07.1
Credibility discount	A valuation haircut applied when management's guidance has been unreliable	05.5
Credit cost	Provisions and write-offs ÷ average loans	07.1
Credit rating	An agency's opinion on the probability of timely debt service, on a scale from AAA to D	03.5
Credit rating / rationale	An agency's opinion on default risk, and the document explaining it and its sensitivities	04.5
Critical / key audit matters	Auditor's disclosure of the most significant audit judgements (PCAOB CAMs in the US; KAMs under SA 701 in India)	02.9
Cross-holding	Group companies owning shares in each other	07.5
Current account	Trade and income balance; crude is India's largest import	12.1
Current maturities of long-term debt	Portion of term loans repayable within 12 months, shown in current borrowings	03.3
Current / non-current	Realised or settled within 12 months or the operating cycle, or not	02.4
Current / quick ratio	Current assets ÷ current liabilities; (current assets − inventory) ÷ current liabilities	04.5
Current vs deferred tax	Tax on this year's taxable profit vs the accounting smoothing of timing differences (non-cash)	02.3
Customer concentration	Share of revenue from the largest customers	05.1
Cut-off	Assigning transactions to the correct period	02.1
CWIP	Capital work-in-progress: capex on assets not yet ready for use; not depreciated · Also: Capital work-in-progress: assets under construction, not yet depreciated	02.4, 09.3
CWIP ageing	Schedule III ageing of capital work-in-progress, with completion schedules for overdue/over-budget projects	03.3
Cyclical	A business whose earnings swing with demand and/or commodity prices	07.3

D

Term	Meaning	Taught in
Data table	Excel's built-in two-way sensitivity tool · Also: Excel's what-if tool for one- and two-way sensitivities	10.1, 10.4
Days-based working capital	Inventory, receivable and payable balances forecast from days assumptions	10.3
DBO	Defined benefit obligation — actuarial present value of promised benefits such as gratuity (Ind AS 19)	03.3
DCF	Discounted cash flow: value = PV of forecast cash flows plus PV of terminal value	06.3
Debit (Dr) / Credit (Cr)	Left / right side of an entry; debits increase assets, expenses and dividends; credits increase liabilities, equity and revenue	02.1
Debt schedule	Forecast of borrowings, repayments, draws and interest	10.3
Dechow F-score	Logistic misstatement model fitted on SEC enforcement cases	09.6
Decision journal	Contemporaneous record of a decision's reasoning, predictions and confidence	11.6
Deemed cost	Ind AS 101 option to use fair value as the cost of PP&E at transition · Also: A transition election to use fair value (or previous carrying amount) as the "cost" of PP&E at transition	02.4, 02.9
Deep dive	The full multi-week research producing the case file and model	11.2
DEF 14A	US proxy statement: pay, board, related parties	03.5
Deferred revenue	Cash billed and collected before revenue is recognised; a liability	04.4
Deferred tax	Tax expense not currently payable (or recoverable), arising from timing differences	02.6
Deferred tax liability / asset	Future tax payable / recoverable arising from timing differences between book and tax (Ind AS 12)	02.8
Degree of operating leverage (DOL)	%ΔEBIT ÷ %Δrevenue = contribution ÷ EBIT; profit's sensitivity to volume	04.2
Delisting / reverse book building	Promoter buy-out of public shareholders; the price-discovery mechanism	07.5
Demerger / spin-off	Separation of a business into a separately listed company · Also: Separation of a business into a new listed company via a scheme of arrangement	07.5, 12.3
Depository (NSDL, CDSL) / demat	Electronic registries of share ownership. A demat account is your account with one of them, via a DP	01.4
Depreciable amount	Cost minus residual value	02.7
Depreciation	Systematic allocation of a fixed asset's cost to the periods that use it	02.1
De-rating	A fall in the valuation multiple independent of earnings	06.8
De-rating / re-rating	A fall / rise in the multiple independent of earnings	06.5
Development costs	Spending on applying research to new products or processes; capitalised only if the six Ind AS 38 criteria are met	02.7
Diluted EPS	Basic EPS adjusted for dilutive potential shares (options, warrants, convertibles)	04.6
Diluted shares	Shares plus potential shares from options, warrants and convertibles	01.2
Dilution	Increase in share count (ESOPs, new issues, conversions) that reduces per-share figures · Also: Increase in shares outstanding, reducing each share's claim	04.1, 05.5
DIO / DSO / DPO	Inventory, receivable and payable days: balance ÷ (material cost or revenue) × 365	00.2
DIO (inventory days)	Inventory ÷ COGS (in India: material cost) × 365	04.4
DIPAM	Department of Investment and Public Asset Management; sets CPSE payout and disinvestment policy	07.5
Direct method	CFO presented as gross receipts and payments	02.5
Discount-closure event	A corporate action that narrows a holdco/conglomerate discount	12.3
Discount rate	The opportunity-cost return used to discount. For a company, typically WACC	01.5
Discount rate / required return	The annual return an investor demands for the risk and the wait; turns future cash into present value	00.1
Disposition effect	Selling winners too early and holding losers too long	11.6
Disqualifying (3)	A finding that removes the investment case until resolved	09.7
Disruption	A substitute whose price-performance improves fast enough to displace incumbents	05.2
Distinct	Capable of benefiting the customer on its own and separately identifiable within the contract	02.2
Dividend discount model (DDM)	Value = PV of expected dividends; single- or multi-stage	06.7
Dividend yield	DPS ÷ share price	04.6
Double-counting risk	Penalising the same risk in the discount rate, the cash flows and the margin of safety	06.4
Double entry	Recording every transaction as equal debits and credits in at least two accounts	02.1
Downside analysis	Identifying and sizing the plausible bad cases before the upside	06.8
DPCO	Drugs (Prices Control) Order: ceiling prices on essential medicines	05.2
DPO (payable days)	Trade payables ÷ COGS (material cost) × 365	04.4
DPS (paid vs declared)	Dividend per share paid in cash during the year, vs declared in respect of the year	04.6
Drawdown	Fall from a peak. Recovering from loss \(L\) needs a gain of \(L/(1-L)\)	01.5
DRHP / RHP	Draft / red herring prospectus — the IPO offer document before / with the price band · Also: Draft / final (pre-pricing) offer document for a public issue	01.3, 03.1, 03.5
Driver	An input assumption (growth rate, margin, days) from which a statement line is computed	10.1
DSCR	Debt service coverage ratio: cash available for debt service ÷ interest + scheduled principal · Also: (EBITDA − cash taxes) ÷ (interest + scheduled principal); the lender's coverage ratio	03.3, 04.5
DSO	Days sales outstanding = receivables ÷ revenue × 365	09.2
DSO (receivable days)	Trade receivables ÷ revenue × 365	04.4
DSRI	Beneish's days-sales-in-receivables index: this year's receivables/revenue ÷ last year's	09.2
DSRI, GMI, AQI, SGI, DEPI, SGAI, LVGI, TATA	The Beneish indices (receivables, gross margin, asset quality, sales growth, depreciation, SG&A, leverage, accruals)	09.6
DuPont analysis	Decomposition of ROE into margin × turnover × leverage (3-step) or with tax and interest burdens (5-step)	04.3

E

Term	Meaning	Taught in
Earnings cycle	Multi-year swings in aggregate corporate profits	12.1
Earnings management	Deliberate use of accounting choices to hit targets or smooth results	09.1
Earnings yield	Earnings ÷ price; the inverse of P/E	12.1
Earnings yield gap	Earnings yield minus the 10-year G-sec yield	12.2
EBIT	EBITDA less depreciation and amortisation; "operating profit"	02.3
EBITDA	Earnings before interest, tax, depreciation and amortisation — an analyst convention, not a standard line	02.3
EBITDA / EBIT / PAT margin	Successive profit subtotals ÷ revenue	04.2
ECL	Expected credit loss: forward-looking provisioning (NBFCs since FY19; banks from Apr-2027)	07.1
ECL allowance	Expected-credit-loss provision against receivables	09.2
ECL allowance / provision matrix	Ind AS 109 provision for expected credit losses; a matrix applies loss rates by ageing bucket	03.3
Economic profit (EVA)	(ROIC − WACC) × invested capital	04.3
Effective annual rate (EAR)	The true annual rate after intra-year compounding: \((1 + r/m)^m - 1\)	01.5
Effective tax rate	Total tax expense ÷ PBT; compare with the statutory 25.17%	02.3
Effective tax rate (ETR)	Tax expense ÷ PBT; reconciled to the statutory rate in the tax note (Ind AS 12)	03.3
Efficient market hypothesis (EMH)	The claim that prices reflect available information (weak, semi-strong, strong forms)	00.1
Embedded value (EV)	Net worth + PV of future profits on in-force life policies	07.2
Emphasis of Matter	Auditor's pointer to a disclosed matter, without modifying the opinion (SA 706)	03.2
Emphasis of Matter (EoM)	Auditor's paragraph drawing attention to a disclosed matter; the opinion is not modified	03.6
Encumbrance / pledge	Using shares as collateral; a price fall can trigger margin calls and forced sales	03.1
Enterprise value (DCF)	PV of FCFF + PV of terminal value; the value of operations	06.3
Enterprise value (EV)	Value of the operating business to all capital providers: market cap + debt + leases + preference + NCI − cash − non-operating assets	01.2
EPC / BOT / HAM	Construction-only / build-operate-transfer (toll or annuity) / hybrid annuity contract models	07.6
EPS (basic / diluted)	PAT attributable to equity holders ÷ weighted-average basic / diluted shares	01.2
Equity	Residual interest in assets after deducting liabilities; the owners' claim	02.1
Equity bridge	The walk from EV to equity value, subtracting non-equity claims and adding non-operating assets · Also: EV − net debt − leases − NCI − other claims + non-operating assets	01.2, 06.3
Equity duration	Sensitivity of equity value to the discount rate; ≈ 1/(r − g) for a growing perpetuity	12.1
Equity method	One-line accounting for associates and JVs: cost + share of profit − dividends received	02.8
Equity risk premium (ERP)	Expected excess return of the equity market over the risk-free rate	06.2
Equity roll-forward	Opening equity + PAT − dividends + issues − buybacks + ESOP credit ± OCI = closing equity	04.6
Equity-settled share-based payment	ESOPs or shares valued at grant-date fair value and expensed over vesting; not re-marked	02.8
Equity vs enterprise multiple	Numerator market cap vs EV; denominator after-interest vs before-interest	06.5
Error log	A table of every mistake, classified as concept, arithmetic, reading or definitional	00.2
ESOP	Employee stock option: the right to buy shares at a fixed exercise price after vesting · Also: Employee stock option plan; a call option granted to employees, expensed under Ind AS 102	01.2, 05.5
ESOP dilution	Increase in share count from employee options; a real cost to per-share value	07.4
Evidence hierarchy	Ranking of evidence by reliability: audited documents first, media last	15.1
EV/tonne, EV/MW, EV/room	Enterprise value per unit of physical capacity	06.7, 07.3
EV/tonne (EV per unit of capacity)	Enterprise value divided by installed capacity; compare with replacement cost per unit	05.4
Exceptional item	A material, unusual income or expense (e.g., Kaveri's FY25 land-sale gain) that should be separated when judging recurring profit · Also: A material, separately disclosed one-off within ordinary activities (Ind AS has no "extraordinary" items)	00.2, 02.3, 04.7
Exit multiple	Terminal value set as a multiple of year-n EBITDA/EBIT — a relative-valuation shortcut	06.3
Expectations (implied)	The growth/return assumptions that make a DCF equal the market price	06.1
Expectations investing	Reading price as a forecast and betting on revisions to that forecast	06.6
Expectation that matters	The driver whose implied value the price most depends on and about which a view can be formed	06.6
Expected column	The base-case values written into the quarterly update before results arrive	15.3
Expected credit loss (ECL)	Forward-looking loss allowance (PD × LGD × EAD); three-stage under Ind AS 109	02.9
Expected credit loss (ECL) allowance	Deduction from receivables for losses expected over their life · Also: Ind AS 109 provision against receivables that may not be collected	02.4, 04.7
Expected value	Probability-weighted average of scenario values	06.8
Expense	Decrease in equity other than distributions to owners	02.1
Expert network	A paid service connecting investors with industry experts, subject to compliance rules	05.7
Explanatory statement	The Sec 102 statement accompanying AGM resolutions, disclosing material facts and interests	03.2
Explicit forecast period	The years modelled driver by driver before steady state	06.3

F

Term	Meaning	Taught in
Face value (par)	Nominal per-share amount; share capital = shares × face value	01.1
Factor exposure	The portfolio's tilt to size, style, sector, rates, flows	11.4
Factoring with recourse	Selling receivables for cash while retaining the credit risk	09.4
Fade	The assumed rate at which excess returns decline toward the cost of capital in a valuation · Also: The decline of ROIC toward WACC over time as competition acts	05.3, 06.1, 06.3
Falsification test	The observable outcome and date that would prove the variant perception wrong	06.6
FCF conversion	(CFO − capex) ÷ PAT or ÷ NOPAT	04.4
FCFE	Cash available to shareholders after debt service and net borrowing	02.5
FCFF	EBIT(1 − t) + D&A − capex − ΔNWC; cash available to all capital providers	02.5
FCFF / FCFE	Free cash flow to the firm (all capital providers) / to equity holders	06.3
fcff_from_projection()	FCFF series derived from the projected statements	10.5
FCF yield	Free cash flow ÷ market cap (or FCFF ÷ EV)	06.5
FCTR	Foreign currency translation reserve: OCI balance from translating foreign operations	02.8
FIFO / weighted average / LIFO	Cost formulas deciding which purchase costs go to COGS; LIFO is not permitted under Ind AS/IFRS	02.7
Financial accounting	Standardised, periodic, audited reporting of a company's position and performance to outsiders	02.1
Financial leverage (DuPont)	Average assets ÷ average equity	04.3
Fiscal deficit / capex	Government borrowing and capital spending	12.1
Five forces	Porter's framework: rivalry, entrants, buyer power, supplier power, substitutes	05.2
Fixed-charge cover	Coverage extended to lease payments and other fixed commitments	04.5
Fixed cost	Cost that does not change with volume in the short run (depreciation, salaried staff, rent)	04.2
Flat rate	Interest charged on the original principal throughout. Roughly half the true reducing-balance rate	01.5
Float	Premiums held before claims are paid; invested for the insurer's account	07.2
Flow regime	The dominant marginal buyer (FPI vs DII/SIP) and its stability · Also: The prevailing marginal-buyer structure	12.1, 12.2
Forecast register	A dated list of probabilistic, scoreable forecasts taken from the journal	15.3
Forensic accounting	Analysis of financial statements to detect manipulation, misstatement or fraud	09.1
Forensic audit	A special investigation, often SEBI- or lender-ordered, into suspected misstatement	09.1
Forensic audit (SEBI-ordered)	Investigation into a listed company's accounts, disclosable under LODR	09.5
Forensic checklist	A structured set of tests with sources, thresholds and scores	09.7
Form 4	US report of an insider's trade, due within two business days	03.5
Form MR-3	Secretarial audit report by a practising company secretary (Sec 204)	03.2
FPI / DII	Foreign portfolio investors / domestic institutional investors (MFs, insurers, banks, pension funds) · Also: Foreign / domestic institutional investors	01.4, 12.2
FPO	Follow-on public offer by a listed company	01.3
Fractional Kelly	A fixed fraction (half, quarter) of the Kelly size, used because inputs are estimates	11.4
Fraud triangle	Pressure + opportunity + rationalisation	09.1
Free cash flow (FCF)	Cash from operations minus capital expenditure; cash the business could distribute without shrinking · Also: Commonly CFO − capex; always state the definition	00.1, 02.5
Free cash flow to the firm (FCFF)	NOPAT + D&A − capex − ΔNWC: cash available to all capital providers	06.1
Free float	Shares available to ordinary investors, excluding promoter, strategic, insider and locked-in holdings	01.2
Free float / IWF	Shares available for trading (non-promoter, not locked in). IWF is the free-float fraction used in index weights	01.4
Fresh-eyes review	Reading a model cold, by another person or after a gap	10.4
Fresh issue	New shares issued by the company; proceeds to the company · Also: New shares issued; the money goes to the company	01.3, 03.5
Functional currency	Currency of an entity's primary economic environment	02.8
Funnel	The staged filtering of ideas from sources to positions	11.1
Funnel statistics	Pass rates between stages; a diagnostic of your filters	15.1

G

Term	Meaning	Taught in
Gambling for resurrection	Levered equity holders' incentive to raise risk because their downside is capped	06.7
GARP / PEG	Growth at a reasonable price; PEG = P/E ÷ expected earnings growth (in %)	00.1
GMV / GOV	Gross merchandise / order value flowing through a platform	07.4
GMV / GTV	Gross merchandise/transaction value flowing through a platform	05.1
GNPA / NNPA / stage 3	Gross / net non-performing assets; Ind AS 109 credit-impaired loans (90+ dpd)	07.1
Goodwill	Price paid for an acquired business minus fair value of its identifiable net assets · Also: Consideration + NCI − fair value of identifiable net assets; not amortised under Ind AS, tested annually for impairment	02.4, 02.8, 05.5, 09.3
Gordon growth formula	Value of a cash flow growing at \(g\) for ever, discounted at \(r\): \(CF_1/(r-g)\), valid only if \(g<r\)	00.1
Gordon growth model	Growing perpetuity: \(PV = C_1/(r - g)\), valid only for \(g < r\)	01.5
Government grant	Assistance from government in return for compliance with conditions (Ind AS 20); related to assets or to income	02.7
Graded vesting	Awards vesting in tranches; each tranche is expensed separately, which front-loads cost	02.8
Grandfathering	Cost step-up to the 31-Jan-2018 price for pre-2018 holdings	11.5
Greenwald's method	Growth capex = average (PP&E ÷ sales) × Δsales; maintenance = capex − growth capex	04.4
Grey-market premium	Unofficial pre-listing IPO premium	12.3
Grey-market premium (GMP)	Unofficial pre-listing price premium on an IPO	12.2
GRM	Gross refining margin ($/bbl): product prices minus crude cost	07.3
Gross block / net block	Original cost of PP&E / cost less accumulated depreciation · Also: Historical cost of PP&E / cost less accumulated depreciation and impairment	02.1, 02.4
Grossman–Stiglitz paradox	Perfectly efficient prices are impossible, because nobody would then be paid to gather information	00.1
Gross margin	(Revenue − cost of goods) ÷ revenue; the pricing-power layer	04.2
Gross NAV	Market/appraised value of holdings before discounts	07.5
Gross vs net revenue	Principal (gross) vs agent (net) presentation under Ind AS 115	09.2
Growing perpetuity	\(CF_1/(r − g)\): the value of a cash flow growing at g for ever	06.1
Growth capex	Capex that adds capacity or capabilities	04.4
Growth effect / intensity effect	The split of ΔNWC into the part due to higher sales at old terms, and the part due to changed terms	04.4
Guidance	Management's stated expectations for future periods.	03.4

H

Term	Meaning	Taught in
Hard no vs flag	An automatic disqualifier vs a concern that becomes a research question	00.3
HHI	Herfindahl–Hirschman Index: sum of squared market shares; > 2,500 is highly concentrated	05.2
Historical band	The range of a company's own multiple over time, with median and dispersion	06.5
Historicals	The block of actual financial statements a model is built on	10.2
Hockey stick	A forecast in which margins or growth jump implausibly after a flat history	06.4
Holdco discount	Gap between a holdco's market value and its gross NAV	07.5
Holding-company discount	Gap between a holdco's market value and the value of its holdings	06.7
Holding company (holdco)	A company whose principal assets are stakes in other companies	07.5
House view	The course's reference Kaveri valuation (₹320 base, ₹306 probability-weighted) that all lessons quote	00.2
Hurdle rate	The minimum return an investor requires; the practitioner's discount rate	06.2

I

Term	Meaning	Taught in
If-converted method	Diluted EPS assuming conversion: add new shares; add back post-tax interest	01.2
IFC opinion	Auditor's opinion on internal financial controls over financial reporting (Sec 143(3)(i))	03.2
IFRS / IAS	International standards issued by the IASB; IAS 1–41 (older) and IFRS 1–18 (newer)	02.9
Impact cost	% difference between the execution price of a trade of a given size and the mid-price. A liquidity measure · Also: Price movement caused by one's own trading	01.4, 11.4
Impairment	Write-down when carrying amount exceeds recoverable amount (Ind AS 36) · Also: Write-down of an asset to recoverable amount (Ind AS 36)	02.7, 09.3
Implied exit multiple	Terminal value ÷ final-year EBITDA (or EBIT); a check on terminal assumptions	06.4
Implied growth / margin / WACC	The value of that input required by the price, others held fixed	06.6
Implied move	The expected absolute price change priced by the ATM straddle for a period (≈ straddle ÷ spot; 1σ ≈ 1.25× that)	11.7
Implied RoE	g + P/B × (\(k_e\) − g)	07.1
Implied RoE (lenders)	\(g + (P/B)(r − g)\): the RoE a P/B multiple requires	06.6
Implied terminal multiple	Today's EV grown at the discount rate ÷ terminal-year EBITDA	07.4
Implied yield on cash	Interest/treasury income ÷ average cash and liquid investments	09.4
Incremental ROIC	Change in NOPAT ÷ change in invested capital: what the new capital earned · Also: Change in NOPAT ÷ change in invested capital over a multi-year window	00.3, 04.3, 05.5
Ind AS	Indian Accounting Standards, converged with IFRS; notified under the Companies Act, 2013	02.9
Ind AS 101 reconciliation	The first-time-adoption bridge from old GAAP to Ind AS equity and profit	02.9
Independent director	Non-executive director with no material relationship with the company or promoters · Also: A board member with no material relationship to the company or promoters, as defined by LODR	01.1, 05.6
Index rebalancing	Scheduled changes to index constituents forcing passive flows	12.3
India VIX	Implied volatility index for the Nifty	12.2
Indirect method	CFO derived by adjusting profit for non-cash items, reclassifications and working-capital changes	02.5
Industry structure	The number and size distribution of competitors; fragmented → consolidated	05.2
Inorganic growth	Revenue from acquisitions made in the last twelve months	04.1
Input mapping	The translation of a company's reported lines into a model's variables	09.6
Input / output method	Measuring progress by effort or cost incurred (cost-to-cost) / by results delivered	02.2
Insider (PIT)	Anyone connected to the company or in possession of UPSI	05.7
Installed base	Units in the field that generate consumables or service revenue	05.1
Intangible asset	Identifiable non-physical asset (software, acquired brand); home-grown brands are not recognised	02.4
Intangibles under development	Capitalised development costs for projects not yet complete	09.3
Integrated filing	SEBI's bundling (from the Dec-2024 quarter) of periodic governance (30 days) and financial (45/60 days) filings	03.1
Integrated Filing (Financial)	The quarterly bundle of results and related statements filed with exchanges since the Dec-2024 quarter.	03.4
Inter-corporate deposit (ICD)	A loan from one company to another, often within a group · Also: A loan between group companies	05.6, 07.5, 09.4
Interest cover	EBIT ÷ finance costs	04.5
Interest tax shield	Tax saved because interest is deductible; captured in WACC, not in FCFF	02.5
Interim / final dividend	Declared by the board during the year / recommended by the board and declared at the AGM	01.3
Intrinsic value	The present value of all future cash the business will distribute to its owners; an estimate, never observed · Also: Present value of all future cash flows to the owner, at a risk-appropriate discount rate	00.1, 06.1
Invested capital	Operating assets net of operating liabilities; equals net financing claims · Also: Net fixed assets + CWIP + ROU + intangibles + net working capital (the uses view, ex-cash)	02.4, 04.3
Investment memo	The written case for a decision: thesis, drivers, valuation, catalysts, risks, breakers, sizing	11.3
Investment property	Property held for rent or appreciation; cost model only under Ind AS 40	02.4
Invocation	The lender selling pledged shares after a margin call	05.6
IPO	Initial public offering: first sale of shares to the public and listing	01.3
IRAC	RBI's income recognition and asset classification norms for banks	07.1
IRAC norms	RBI's Income Recognition, Asset Classification and Provisioning rules for banks (incurred-loss based)	02.9
IRR	The discount rate at which NPV = 0	01.5
Issuer not cooperating (INC)	A rating maintained on public information because the issuer stopped providing data	03.5
IWF	NSE's Investible Weight Factor — free-float shares ÷ total shares, used to weight indices	01.2

J

Term	Meaning	Taught in
Journal entry	The record of one transaction as debits and credits	02.1
Jump scenario	A tail outcome (governance, fraud, regulation) added to the scenario tree	11.4
Justified P/B	(ROE − g)/(r − g)	06.5
Justified P/E	(1 − g/ROE)/(r − g): the forward P/E consistent with the Gordon model	06.5

K

Term	Meaning	Taught in
Kelly criterion	Bet size proportional to edge ÷ variance; usually applied fractionally · Also: The bet size that maximises expected log wealth (long-run growth)	06.8, 11.4
Key Audit Matter (KAM)	A matter of most significance in the audit (SA 701), mandatory for listed companies · Also: A matter the auditor judged most significant in the audit, with the procedures performed	03.2, 03.6, 09.2
Key managerial personnel (KMP)	CEO/MD, CFO, company secretary, whole-time directors	05.6
Kill criteria / kill log	Pre-set reasons to drop an idea; the record of dropped ideas and why	11.1
Kill log	A record of every idea rejected, with date, price and reason; the data for judging your own gates	00.3
Kill test	A 30-minute search for reasons not to research a company further; outputs pass/kill and research questions · Also: A 30-minute screen for disqualifiers and a mispricing reason	00.3, 11.2, 15.1
KMP	Key managerial personnel: MD/CEO, CFO, company secretary (and whole-time directors)	01.1
KPI tracker	The monitoring table: each KPI with its latest value, base-case requirement, bull and breaker thresholds, and next reading date	00.3

L

Term	Meaning	Taught in
L1 tender	Government tender awarded to the lowest bidder	05.4
Large / mid / small cap	SEBI buckets by full market-cap rank: 1–100, 101–250, 251+. AMFI publishes the list semi-annually	01.4
LCR	Liquidity coverage ratio	07.1
Lead time (gestation)	Time from the decision to build capacity until it produces	05.4
Learning journal	A dated record of each study session, including the explain-it-simply test	00.2
Lease-adjusted FCF	FCF − lease payments; restores comparability after Ind AS 116	02.5
Lease liability	Present value of future lease payments; debt-like · Also: PV of future fixed lease payments, discounted at the implicit rate or incremental borrowing rate	02.4, 02.7
Ledger / T-account	The collection of accounts / one account's page, debits on the left and credits on the right	02.1
Legal person	An entity (like a company) that the law treats as able to own property, contract, sue and be sued in its own name	01.1
Leverage	The extent to which assets are financed by debt; debt/equity, net debt/EBITDA	04.5
Liability	Present obligation to transfer an economic resource, arising from past events	02.1
Life cycle	Emerging → growth → mature → decline, each with its own economics	05.2
LIFO reserve	Difference between FIFO (current) and LIFO inventory values; used to convert LIFO to FIFO	02.9
Limited liability	A shareholder's maximum loss is what they paid (plus any unpaid amount on partly paid shares)	01.1
Limited review	A lighter assurance on quarterly results than an audit; the auditor reports whether anything suggests material misstatement · Also: A review of interim results by the statutory auditor (SRE 2410), mainly enquiry and analytics, giving negative assurance.	03.1, 03.4
Linkage	A rule tying a line in one statement to a line in another (e.g., PAT → retained earnings)	02.6
Liquidation value	Forced-sale value of assets less all liabilities and costs	06.7
Liquidity	The ability to meet obligations falling due in the next 12 months	04.5
Liquidity cover	(Cash + unutilised lines + expected collections) ÷ debt repayments over a period	03.6
Liquidity descriptor	Strong/Superior, Adequate, Stretched or Poor — the rating agency's standardised view of near-term liquidity	03.5
LODR	SEBI's Listing Obligations and Disclosure Requirements Regulations, 2015: what listed companies must disclose, and when · Also: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: a listed company's continuing disclosure rules	00.2, 01.4, 03.1
Log return	\(\ln(P_1/P_0)\). Additive through time	01.5
Look-through interest	Product of ownership percentages down a chain of holdings	01.1
LTCG / STCG	Long-/short-term capital gains; for listed Indian equity, the long-term threshold is 12 months	00.1
LTV	Lifetime value: discounted contribution expected from a customer over their life	05.1

M

Term	Meaning	Taught in
Macroprudential	Regulatory tools (risk weights, LTV caps) targeting credit segments	12.1
Magic formula	Greenblatt's joint ranking on earnings yield and return on capital	11.1
Maintenance capex	Capex needed to keep existing volume and competitive position	04.4
Management-defined performance measure	Under IFRS 18, a non-GAAP subtotal used in public communications that must be disclosed and reconciled	02.9
Managerial remuneration cap	Companies Act limits on directors' pay as a percentage of net profit	05.5
Marginal NWC ratio	ΔNWC ÷ Δrevenue over a period; the working capital that each extra rupee of sales needed	04.4
Marginal producer	The highest-cost producer needed to meet demand; its cash cost anchors the price floor	07.3
Margin bridge	Decomposition of a margin change into mix, rate (price/cost) and volume/scale components	04.2
Margin money	Bank deposit pledged against guarantees or letters of credit; restricted cash	02.4
Margin of safety	The gap between estimated value and price, big enough to absorb estimation errors · Also: The discount to estimated value you require before buying, sized to your uncertainty	00.1, 00.3, 06.1, 06.8
Market cap / GDP	Total equity market value relative to the economy	12.2
Market capitalisation	Share price × shares outstanding; the market price of the company's equity · Also: Shares outstanding × market price	00.1, 01.1, 01.2
Market-wide circuit breaker	Nationwide halt when Nifty 50 or Sensex moves 10/15/20%	01.4
Matching principle	Pair EV with pre-interest measures and equity value with post-interest measures · Also: Recognising expenses in the same period as the revenue they help earn	01.2, 02.2
Material accounting policies	Note describing how items are recognised and measured; changes are applied retrospectively (Ind AS 8)	03.3
Material event (Reg 30)	An event the company must disclose within 30 min / 12 h / 24 h, deemed material or above the 2%/2%/5% thresholds	01.4
Materiality threshold	Under Reg 30: lowest of 2% of turnover, 2% of net worth, 5% of 3-year average absolute PAT	03.1
Material RPT	An RPT above SEBI's turnover-slabbed threshold, requiring shareholder approval with related parties abstaining	05.6
Material uncertainty (going concern)	Disclosed doubt about the company's ability to continue for at least 12 months	03.3
Material uncertainty related to going concern	Auditor's flag (SA 570) of significant doubt about the company's ability to continue · Also: Auditor's flag that the company may not continue	03.2, 09.5
MAT / MAT credit	Minimum Alternate Tax on book profit; the credit for MAT paid above normal tax (no new credit from FY27)	02.8
Maturity ladder	Schedule of debt repayments by year; bunching = refinancing risk	04.5
Max-loss rule	Position size chosen so the bear case costs no more than a fixed share of the portfolio · Also: Position size ≤ acceptable portfolio loss ÷ bear-case loss	06.8, 11.4
Max-loss sizing	Position size = loss budget ÷ loss in the bad case	00.3
MCA21	The Ministry of Corporate Affairs' filing portal; source of AOC-4 (financials), MGT-7 (annual return) and charge filings for every company	03.1
MD&A	Management Discussion & Analysis (LODR Schedule V Part B), including explanations of ratios that moved ≥25%	03.2
Mean reversion	The tendency of abnormal margins to move back toward industry norms as competition responds	04.2
Median-employee ratio	Ratio of each director's pay to the median employee's pay (Sec 197(12), Rule 5(1))	03.2
Merchant power	Power sold at market prices outside PPAs	07.6
Merton model	Equity as a call option on firm assets with strike equal to debt	06.7
Mid-year convention	Discounting each year's cash flow by \(t − 0.5\) years to reflect intra-year receipt	06.3
Minimum public shareholding	SEBI requirement of ≥ 25% public float	07.5
Minimum public shareholding (MPS)	SEBI's 25% public float requirement	09.5
Minority shareholders	Public shareholders without control	05.6
Mix effect	Revenue change from a shift in the blend of products (or segments, channels, geographies) sold · Also: Change in a blended margin caused by the weights of segments/products shifting	04.1, 04.2
Moat	A durable competitive advantage that protects returns on capital from competition	00.1
Moat / durable competitive advantage	A structural feature that allows sustained returns above the cost of capital despite visible competition	05.3
Moat erosion	The decline of an advantage through technology, entry, regulation or channel shifts	05.3
Moat-washing	Describing ordinary advantages as durable moats	05.3
Model QA	Structured review for logical, arithmetic and presentation errors	10.4
MOIC	Multiple on invested capital: total money back ÷ money in	01.5
Monitoring plan	The KPIs, sources, frequency and thresholds used to track the thesis	11.3
Monte-Carlo simulation	Repeated random sampling of inputs to produce a distribution of outputs	06.8
Montier C-score	Six-flag "cooking the books" screen	09.6
Mosaic theory	The (US) idea that assembling non-material pieces into a material conclusion is legitimate; treat with caution in India	05.7
MSE dues	Trade payables owed to micro and small enterprises; 45-day rule under the MSMED Act	02.4
Multibagger	A stock that rises many-fold (a "10-bagger" rises 10x)	00.1
Multiple	Price (equity or enterprise) divided by a fundamental (earnings, book, sales, cash flow)	06.5
Multiple compression	De-rating caused by slower growth or higher rates	06.5
Multiple expansion / compression	Return from a rising / falling P/E, as distinct from earnings growth	01.5
MWPL / ban period	Market-wide position limit; trading restrictions when breached	11.7
MWPL / FutEq OI / F&O ban	Market-wide position limit; delta-adjusted open interest; a ban on new F&O positions when OI exceeds 95% of MWPL	01.4

N

Term	Meaning	Taught in
Narrative fallacy	Preferring coherent stories to statistical evidence	11.6
NAV	Net asset value: assets at market/appraised value − liabilities	06.7
NAV (real estate)	PV of project cash flows + land + rental assets − debt	07.6
NCD	Non-convertible debenture: a bond	01.3
NCI	Non-controlling interest — outside shareholders' share of subsidiaries' profit and equity	02.3
Negative assurance	"Nothing has come to our attention…" — weaker than an audit's positive "true and fair" opinion.	03.4
Negative working capital / float	NWC below zero: customers and suppliers fund the business; growth releases cash	04.4
Net debt	Borrowings − cash and liquid investments (lease liabilities shown separately in this course) · Also: Borrowings (+ leases) − cash − liquid investments	01.2, 04.5
Net-net	Graham's test: a stock priced below current assets minus all liabilities · Also: Graham's screen: current assets − all liabilities > market cap	00.1, 06.7, 11.1
Net operating assets (NOA)	Operating assets − operating liabilities; excludes cash, investments and debt	04.7
Net realisable value (NRV)	Estimated selling price less costs to complete and sell; inventory cap · Also: Estimated selling price less costs to complete and sell; inventory is carried at the lower of cost and NRV	02.4, 02.7
Network economies (effects)	Product value rising with the number of users	05.3
Net working capital (NWC)	Operating current assets minus operating current liabilities	02.4
NFRA	National Financial Reporting Authority — India's audit regulator · Also: Audit regulator; publishes inspection findings and penalties	09.1, 09.5
NII / NIM	Net interest income = interest earned − paid; NIM = NII ÷ average interest-earning assets (or loans)	07.1
Non-cash transaction	Investing or financing transaction with no cash movement (share-funded acquisition, new lease) · Also: A transaction with no cash movement (new lease, share-funded acquisition, capex on credit)	02.5, 02.6
Non-controlling interest (NCI)	Outside shareholders' share of a consolidated subsidiary · Also: Outside shareholders' share of a subsidiary's equity (consolidated only)	01.1, 02.4, 02.8
Non-speculative business income	Indian tax classification of F&O profits	11.7
NOPAT	Net operating profit after tax = EBIT × (1 − tax rate)	02.5, 04.3
Normal capacity	The production level expected on average; fixed overhead is absorbed into inventory on this basis, and the unabsorbed part is expensed	02.7
Normalisation	Adjusting reported profit for one-offs to estimate underlying, recurring earnings. · Also: Adjusting history for one-offs and policy changes	03.4, 10.2
Normalised / mid-cycle earnings	Earnings at through-cycle average margins on current volumes	07.3
Normalised (recurring) earnings	Profit adjusted to remove non-recurring items, with tax effects	04.7
NPV	Sum of discounted cash flows minus the upfront cost	01.5

O

Term	Meaning	Taught in
OBICUS	RBI's quarterly survey of manufacturers' order books, inventories and capacity utilisation	05.4
OCI	Other comprehensive income — gains/losses that bypass the P&L and go straight to equity	02.3
Offer for sale (OFS)	Existing holders sell shares; proceeds to the sellers · Also: Existing shareholders sell; the money goes to them	01.3, 03.5
OFS	Offer for sale by a promoter (often the government) through the exchange mechanism	07.5
Old Indian GAAP (AS)	The pre-Ind AS Accounting Standards (AS 1–32), still used by smaller unlisted companies, SME-exchange companies and banks	02.9
Omnibus approval	Audit-committee approval of expected related-party transactions up to a limit for the year	03.6
One-pager	The compressed decision version of the memo	11.3
One-page thesis	The one-page output of the workflow: decision, what the price implies, variant perception, valuation, flags, catalysts, KPIs, pre-mortem, sizing	00.3
Open offer (SAST)	Mandatory offer to public shareholders on a change of control or crossing 25%	12.3
Operating cycle	Time from buying inputs to collecting cash from customers · Also: The loop cash → inventory → receivable → cash	02.4, 04.4
Operating net working capital (NWC)	Inventories + receivables + other operating current assets − payables − other operating current liabilities; excludes cash and debt	04.4
Operating profit before working-capital changes	PBT adjusted for non-cash and non-operating items; ≈ EBITDA + non-cash charges	02.5
Operating Profit / OPM (Screener)	Sales − Expenses, before other income, depreciation and interest / that divided by sales	00.2
Operating Profit (Screener)	Sales − Expenses, before other income, D&A and interest (= EBITDA excl. other income)	04.6
Operating RoEV	Operating growth in embedded value ÷ opening EV	07.2
Operating segment	A component reviewed separately by the chief operating decision-maker (Ind AS 108)	03.3
Operator	A market participant who manipulates thinly traded stocks through coordinated trading and promotion	09.5
Order book	Contracted but unexecuted revenue in a project business	05.1
Order book; book-to-bill	Unexecuted contracts; new orders ÷ revenue	07.6
Ordinary / special resolution	Passed by votes for > votes against / votes for ≥ 3 × votes against · Also: Shareholder resolutions passed by simple majority / at least 75% of votes cast	01.1, 03.2
Organic growth	Growth from businesses owned in both periods, usually at constant currency	04.1
Other comprehensive income (OCI)	Gains and losses kept out of profit; TCI = PAT + OCI	02.8
Other equity	Ind AS balance-sheet heading for all reserves, including retained earnings, securities premium, ESOP reserve and OCI reserves	02.1
Other income	Non-operating income: interest, dividends, investment gains, FX gains, asset-sale profits	02.3
Over time / point in time	Revenue recognised progressively as work is performed / at the moment control transfers	02.2
Owner earnings	Buffett's PAT + D&A and non-cash charges − maintenance capex (and maintenance WC)	02.5

P

Term	Meaning	Taught in
Page reference	The citation to the filing page supporting each score	09.7
Pair trade	Long one stock, short a similar one	11.7
Pari passu	Ranking equally; sharing pro rata if funds are insufficient	01.1
Pass-through	The ability and speed with which input-cost changes are reflected in selling prices	04.2
Past service cost	Change in DBO from a plan amendment or law change (e.g., the 2025 labour codes), recognised in P&L	03.3
Path to profitability	A driver-based forecast of when and how contribution overtakes fixed costs	07.4
Payback period (customer/store)	Time for cumulative contribution to recover CAC or store capital	05.1
Payoff asymmetry	Upside to the good case ÷ downside to the bad case, measured from the price · Also: The ratio of upside to downside from the current price across scenarios	00.3, 06.4, 06.8
Payout ratio	Dividends ÷ PAT (or ÷ FCF, to test cash cover) · Also: Dividends ÷ PAT (or ÷ FCF)	04.6, 05.5
Payout ratio / dividend yield	Dividends ÷ PAT / dividend per share ÷ price	01.3
P/B, P/ABV	Price ÷ book value; price ÷ adjusted (for NNPA etc.) book value	07.1
PBT / PAT	Profit before / after tax	02.3
PCR	Provision coverage ratio: stage-3 provisions ÷ stage-3 loans	07.1
P/E and earnings yield	Price ÷ earnings per share; its inverse (earnings ÷ price) is the earnings yield	00.1
Peer dashboard	The same ratios across comparable companies for one period, on consistent definitions	04.6
Peer set / comparables	Companies with similar growth, returns and risk used for relative valuation	06.5
PEG	P/E ÷ expected growth rate (in %); a heuristic	06.5
Pendulum (Marks)	The oscillation of market psychology between extremes	12.2
P/E paradox	Cyclicals show low P/Es at earnings peaks and high P/Es at troughs	07.3
P/E, P/B, earnings yield	Price ÷ EPS; price ÷ BVPS; EPS ÷ price	01.2
Percentage-of-completion (POC)	Over-time revenue recognition on long contracts based on progress	09.2
Percentile band (P10–P90)	The range containing the central 80% of simulated values	06.8
Performance obligation (PO)	A promise to transfer a distinct good or service; the unit of account for revenue	02.2
Perpetuity	A cash flow forever: \(PV = C/r\)	01.5
Persistency	Share of policies still in force after a given period (13th, 25th, 37th, 61st month)	07.2
P/EV	Market capitalisation ÷ embedded value	07.2
Physical settlement	Delivery of shares on expiry for single-stock derivatives	11.7
Piotroski F-score	Nine binary fundamental-strength signals; 8–9 strong, 0–2 weak	09.6
PIT	SEBI Prohibition of Insider Trading Regulations, 2015 — insiders report trades above ₹10 lakh per quarter within two trading days	03.1
Pledge	Promoter shares given as collateral for a loan; a forced-selling risk if the price falls	01.1
Pledge / encumbrance	Shares given as collateral for a loan (encumbrance also covers liens and non-disposal undertakings). Disclosed under SAST Reg 31 · Also: Promoter shares given as loan collateral; disclosed under SAST Reg 31	01.4, 05.6
Pledge invocation	Lender selling pledged promoter shares	09.5
PLF	Plant load factor: actual generation ÷ capacity	07.6
PLI	Production-Linked Incentive: government subsidy tied to incremental domestic output	05.2
Plug	The line a model uses to force balance — should be cash or a revolver, never an arbitrary "other" · Also: The balancing item; in a well-built model, cash or the revolver, once	02.6, 10.1
Portfolio pre-mortem	A narrative of how the whole portfolio failed	11.4
Positive skewness	A distribution with a long right tail; for stocks, the mean is far above the median	00.1
Post-earnings-announcement drift	Tendency of prices to continue moving after a surprise	11.1
Post-mortem	Structured review of a closed position: expectations, outcome, process, lessons	11.5
PPA	Power purchase agreement: long-term contracted tariff	07.6
PPOP	Pre-provision operating profit	07.1
Preference share	Share ranking ahead of equity for dividends and capital, usually fixed-rate	01.1
Preferential allotment	Issue of shares or convertibles to named investors, approved by special resolution	01.3
Preferential allotment / warrants	Issue of shares or share-purchase rights to selected investors at a regulated floor price	05.6
Pre-mortem	Imagining the investment has already failed and writing down the most likely reasons · Also: A narrative of how the position failed, written before it is taken	00.3, 11.3, 11.6
Prepaid expense	Cash paid before the expense is recognised; an asset until used	02.6
Pre-sales / bookings	Value of units contracted for sale in a period (real estate); an operating KPI, not revenue · Also: Value of residential units sold in a period, before revenue recognition	02.2, 07.6
Present value / discount factor	Today's value of a future cash flow; \(1/(1+r)^n\)	01.5
Present value (PV)	A future amount shrunk by the required return for each year of waiting: \(CF_t/(1+r)^t\)	00.1
Price	The last traded price of a share; set by whoever is trading, for any reason	00.1
Price band / circuit	Maximum permitted daily move for a non-F&O stock (2/5/10/20%)	01.4
Price deck	The commodity price assumptions by year in a model	07.3
Price effect	Revenue change from like-for-like price changes on each product	04.1
Price-taker	A producer of an undifferentiated product sold at a market price it cannot influence	07.3
Price war	Competition in which the dominant lever is price cuts, usually triggered by a well-funded entrant or excess capacity	05.2
Pricing power	Ability to raise prices ahead of costs without losing volume	05.3
Primary / secondary transaction	New securities issued, cash to the company / existing securities traded between investors	01.3
Primary source	The original document (annual report, exchange filing, regulator order), as opposed to an aggregator's copy	00.2
Principal / agent	Controls the good before transfer and reports gross / arranges for another party and reports net	02.2
Priority of claims	The order in which claimants are paid; in Indian liquidation, fixed by IBC s.53	01.1
Private / public / listed company	Restricted-transfer company with ≤200 members / any non-private company / company with securities on a recognised exchange	01.1
Probability-weighted value	The sum of scenario values times their probabilities (Kaveri: ₹306) · Also: Σ (probability × scenario value)	00.3, 06.4
Process changelog	Dated record in PROCESS.md of each rule change, its evidence and its test	15.4
Process power	Embedded organisational capability that delivers lower cost or higher quality and takes years to copy	05.3
Process vs outcome	Judging decisions by their quality at the time, not by their result	11.6
Profit bridge	A walk from one period's profit to another's, line by line.	03.4
Profit pool	The distribution of an industry's total profit across the stages of its value chain	05.2
project()	The fi.model function that turns history + assumptions into three balanced statements and checks	10.5
Promoter	India: the founder/controlling shareholder group of a listed company · Also: The controlling person/group of an Indian company, with specific legal obligations	00.1, 01.4
Promoter pledge	Promoter shares given as collateral for loans; a margin-call risk for the stock	04.5
Promoter / promoter group	The controlling founder, family, group, parent or government, and persons connected to it · Also: The controlling person(s) of a company and their connected entities, as defined by SEBI	01.1, 05.6
Provision	A recognised liability of uncertain timing or amount (Ind AS 37)	02.8
Provision roll-forward	Opening + charge − utilisation − reversal = closing	09.3
Provision vs contingent liability	Probable and measurable → recognised; possible (or unmeasurable) → disclosed only (Ind AS 37)	03.3
Provision write-back	Reversal of an earlier provision into profit	04.7
PSU / CPSE	Public-sector undertaking / central public-sector enterprise	07.5
Purchase price allocation (PPA)	Assigning the acquisition price to identifiable assets and liabilities at fair value; the residual is goodwill	02.8

Q

Term	Meaning	Taught in
QIB	Qualified institutional buyer (mutual funds, insurers, banks, FPIs, etc.)	01.3
QIP	Qualified institutions placement: fast share issue to QIBs only	01.3
QIP / preferential allotment / warrants	Equity issuance to institutions / to chosen investors (often promoters) / rights to buy shares later at a fixed price	05.5
Qualified / adverse / disclaimer opinion	Audit opinions indicating misstatement or inability to obtain evidence	09.5
Qualifying asset	An asset that takes a substantial period to get ready; borrowing costs on it are capitalised (Ind AS 23)	02.7
Quality of earnings	The degree to which reported profit is cash-backed, recurring, operating and attributable to shareholders	04.7
Quarterly review	The structured update of the thesis after each result	11.5

R

Term	Meaning	Taught in
RAG rating	Red / Amber / Green summary of the checklist	09.7
Rate effect	Change in a blended margin caused by segments' own margins changing	04.2
Rating outlook / watch	Stable, Positive or Negative direction over 1–2 years / a flag that a pending event may change the rating soon	03.5
Rating rationale	A credit-rating agency's published explanation of a rating action	03.1
Rating sensitivities	The specific factors that would trigger an upgrade or downgrade	03.5
Ratio dashboard	A fixed-order, fixed-definition table of ratios across years, read as a causal chain	04.6
Realisation	Average selling price per unit achieved	07.3
Real option	Managerial flexibility (expand, abandon, defer, switch) valued as an option	06.7
Real vs nominal	Return in purchasing power vs in rupees: \((1+n) = (1+r)(1+\pi)\) (Fisher)	01.5
Receivables ageing schedule	Schedule III (2021) breakdown of receivables by time overdue, disputed/undisputed, credit quality	03.3
Reclassification	Moving an item between categories (e.g., other income out of EBITDA) for analytical consistency	10.2
Reconciliation of financing liabilities	Ind AS 7 para 44A disclosure of cash and non-cash changes in debt and leases	02.5
Record date / appointed date / effective date	Dates fixing entitlement / accounting transfer / legal effect	12.3
Record date / ex-date	Date the register is fixed for entitlement / first trading day without the entitlement	01.3
Recoverable amount	Higher of fair value less costs of disposal and value in use	02.7
Red team	A deliberate argument for the opposite conclusion · Also: A reviewer, human or AI, whose job is to break the case before a decision	11.6, 15.4
Reference valuation	The course's base case (₹320) that the build must reproduce	10.5
Refund liability	Expected rebates, returns or price concessions owed to customers	02.2
Reg 30	LODR rule requiring disclosure of material events (Schedule III Part A deemed material; Part B subject to materiality test)	03.1
Reg 33	LODR rule on financial results: 45 days after each of Q1–Q3; 60 days after year-end (audited)	03.1
Regulated equity base	The equity on which a regulator allows a return	07.6
Regulation 33 (LODR)	The SEBI rule governing the preparation, approval, review and filing of quarterly and annual results.	03.4
Regulatory moat	Protection arising from licensing or regulatory limits on entry	05.3
Reinvestment identity	Sustainable growth g = reinvestment rate × ROIC	04.3
Reinvestment rate	(Capex + ΔNWC − D&A) ÷ NOPAT; the share of profit ploughed back · Also: Share of NOPAT reinvested = g / ROIC in steady state	04.3, 06.1
REIT / InvIT	Listed trusts holding income-generating real estate / infrastructure; ≥ 90% distribution	07.6
Related party	A person or entity with control, joint control, significant influence or KMP status, or a group member (Ind AS 24) · Also: Entities/persons that control, are controlled by, or significantly influence the company, and KMP and their relatives (Ind AS 24)	02.8, 03.3
Related party / RPT	Persons or entities connected to the company's controllers; transactions with them	05.6
Related-party transaction (RPT)	A transaction between the company and a party connected to it (promoters, directors, group companies) · Also: Dealings with promoters, directors, group companies or their relatives	01.1, 04.7
Relative value	Value inferred from the prices of comparable assets (multiples)	06.1
Remaining performance obligations	Contracted revenue not yet recognised; an audited order book · Also: Unexecuted portion of contracts; an audited cousin of the order book	02.2, 03.3
Renunciation	Selling or transferring a rights entitlement	01.3
Replacement cost	Cost of building an equivalent unit of capacity today · Also: Cost to rebuild the assets today	05.4, 06.7, 07.3
Repo rate / stance	RBI's policy rate and its bias (accommodative, neutral, withdrawal)	12.1
Required (implied) demand growth	Demand growth needed to keep utilisation constant once announced capacity arrives	05.4
Research-as-procrastination	Continuing to gather information after conclusions have stopped changing	11.2
Research log	Dated record of what you learned, from whom, and what you expected — for bias control and compliance · Also: Dated record of sources, findings, confidence and next actions	05.7, 11.2
Research workflow	The ten steps from idea to decision to monitoring; the organising map of this course	00.3
Residual claim	The claim on whatever remains after all fixed claims are met — the defining feature of equity	01.1
Residual claimant	Equity holders: paid last, after lenders, suppliers, employees and taxes, but own all the upside	00.1
Residual-income model	Value = book value + PV of residual income; equivalent to DCF under clean-surplus accounting	06.7
Residual income (RI)	PAT − \(k_e\) × opening book value; profit above the equity charge	06.7
Restatement	Revision of previously reported figures	10.2
Retained earnings	Cumulative profits kept in the business; the bridge between the P&L and the balance sheet · Also: Cumulative profits not paid out as dividends	02.1, 02.4
Retrieval practice (testing effect)	Learning by recalling from memory; produces better long-term retention than re-reading	00.2
Re-underwriting	Deciding whether you would buy the position today at this price with current knowledge	11.5
Revenue build	The driver structure that produces the revenue forecast	10.3
Revenue from operations	Sales of goods and services plus other operating revenue; excludes other income	02.3
Revenue / income	Increase in equity other than from owner contributions	02.1
Reverse book building	Delisting price discovery by shareholder tenders	12.3
Reverse DCF	Solving a DCF backwards for the growth (or margin) that makes value equal to the price · Also: Solving a DCF backwards for the input value that makes model value equal the market price	00.3, 06.6
Revolver	A revolving credit facility used in models to fund any cash shortfall · Also: A modelled short-term borrowing that draws when cash would fall below a minimum and repays when cash is surplus	02.6, 10.1, 10.3
Revolver (min_cash)	Model logic that draws short-term debt to keep cash above a floor	10.5
Right-of-use (ROU) asset	A lessee's right to use a leased asset, recognised under Ind AS 116 · Also: Lessee's asset representing the right to use a leased item (Ind AS 116)	02.4, 02.7
Rights entitlement (RE)	Tradable right to subscribe to a rights issue	12.3
Rights issue / rights entitlement (RE)	Pro-rata offer of new shares to existing holders / the tradable right to subscribe	01.3
Risk-free rate	Yield on a default-free bond in the cash flows' currency; India: 10-yr G-sec	06.2
Risk reversal	Long call + short put (synthetic long with skew)	11.7
RoA tree	Decomposition of return on assets into spread, fees, opex, credit cost and tax	07.1
ROCE	(EBIT + other income) ÷ average capital employed (equity + borrowings + lease liabilities); pre-tax	04.3
ROCE (Screener)	(PBT + interest, excl. exceptional items) ÷ average (share capital + reserves + borrowings incl. leases)	04.6
ROE	PAT ÷ average shareholders' equity	04.3
ROIC	NOPAT ÷ average invested capital; post-tax, operating assets only	04.3
ROIC / WACC	Return on invested capital (after-tax operating profit ÷ capital employed in the business) / weighted average cost of capital (the blended return lenders and shareholders require). Growth creates value only if ROIC > WACC	00.1
Roll-forward	Opening balance + additions − deductions = closing balance, for a balance-sheet line · Also: Adjusting a valuation from its date to today at the cost of equity	02.6, 06.3, 06.4, 10.2
RONIC	Return on new invested capital, the ROIC that matters for growth's value	06.1
Round-tripping	Circular transactions that create revenue without economic substance	09.2
Row mapping	Translating a data source's labels into the model's required rows	10.5
Royalty / brand fee	Payment by a subsidiary to its parent for technology or brand use	05.6
Royalty / technical fee	Payment by a subsidiary to its parent for brands, technology or services	07.5
RTA	Registrar and transfer agent; services mutual funds' investor records	07.2
Rule of 40	Growth % + margin % ≥ 40 as a health screen for software/platform businesses	07.4
Rule of 72	Doubling time ≈ 72 ÷ rate (%). Accurate near 8%	01.5
Running example	The fictional Kaveri Pumps and Nirmal Finance, used with fixed numbers throughout the course	00.2

S

Term	Meaning	Taught in
Safe harbour	The disclaimer at the start of a call noting that forward-looking statements are uncertain.	03.4
Sale-and-leaseback	Selling an asset and leasing it back; converts an asset into lease cash flows	09.4
SAST	SEBI Substantial Acquisition of Shares and Takeovers Regulations, 2011 — includes 5%/2% holding disclosures (Reg 29) and pledge disclosures (Reg 31)	03.1
SAST open offer	Mandatory offer to public shareholders when an acquirer crosses 25% (or creeps more than 5% a year above 25%)	01.4
Say-do ledger	A dated record of management's quantified statements and actual outcomes. · Also: A record of management's dated, measurable commitments and whether they were met	03.4, 03.6
Say-do ratio	Frequency with which management's stated guidance is delivered	05.5
Say-do table	Record of management guidance vs delivery · Also: Guidance vs delivery record	11.2, 11.5, 15.2
Scaffold	The case folder created from the templates by tools/new_case.py	15.2
Scale economies	Falling unit costs with volume, making a challenger's cost structure uncompetitive	05.3
Scarcity premium	A higher multiple paid because few comparable listed assets exist	06.5
Scenario	A coherent set of assumptions describing one way the future could unfold	06.4
Scenario switch	A single input that selects a full set of driver values	10.4
Schedule	A calculation block for one area (working capital, PP&E, debt)	10.1
Schedule III	The Companies Act, 2013 format for financial statements; Division II for Ind AS non-financial companies	02.4
Schedule III Divisions I / II / III	Financial-statement formats for old-GAAP companies / Ind AS non-financial companies / Ind AS NBFCs	02.9
Schilit's taxonomy	Classification of shenanigans into earnings, cash-flow and key-metric manipulation	09.1
Scorecard	A structured, weighted checklist producing a comparable quality score	04.7
Screen	A quantitative filter applied to a universe of stocks	11.1
Scuttlebutt	Fisher's term for gathering information about a company from the people who deal with it	05.7
Seasonality	Predictable within-year pattern in revenue and margins (e.g., Kaveri's Q4/Q1 peak).	03.4
SEBI	Securities and Exchange Board of India, the capital-markets regulator	01.4
Secured creditor	A lender with a charge over specific assets	01.1
Securities premium	Excess of issue price over face value, held in other equity · Also: Amount received for shares above face value; restricted use under Section 52	01.1, 02.4
Self-funding growth rate (g*)	The fastest growth at which pre-financing FCF stays non-negative, given margin, capex and NWC intensity	04.4
Sell-in vs sell-through	Company's sales to the channel vs the channel's sales to end customers	05.7
Sensitivity / false-positive rate	Share of true cases flagged / share of clean cases wrongly flagged	09.6
Sensitivity table	A grid of values across two inputs, holding everything else constant	06.4
Shareholder yield	(Dividends + buybacks − cash from share issues) ÷ market cap	04.6
Shareholding pattern	Quarterly breakdown of ownership by category, including pledged promoter shares (Reg 31, 21 days)	03.1
Shareholding pattern (SHP)	Quarterly breakdown of ownership by category, filed within 21 days of quarter-end	01.4
Shares outstanding	Shares issued and held by investors; in India ≈ shares issued, since bought-back shares are extinguished	01.2
Short-seller report	Published research by an investor positioned to profit from a price fall	09.1
SIP	Systematic investment plan: a fixed monthly mutual-fund investment · Also: Systematic investment plan; recurring retail mutual-fund inflows	01.4, 07.2
SIP stoppage ratio	SIPs discontinued as a share of new registrations	12.2
Size / liquidity premium	Extra return demanded for small, illiquid stocks beyond CAPM	06.2
Skew	The difference between put and call implied vols at equal moneyness	11.7
Skin in the game	Management's own economic exposure to the company's outcome	05.5
Slippages	Loans newly classified as NPA in a period	07.1
SLM / WDV	Straight-line (equal charge) vs written-down value (fixed percentage of opening book value) depreciation	02.7
Sloan accruals ratio	(PAT − CFO) ÷ average total assets	09.6
Solvency	The ability to service debt (interest and principal) from earnings and cash flow over time	04.5
Spaced repetition	Reviewing material at growing intervals, just before you would forget it	00.2
Special situation	An investment driven by a corporate event (demerger, buyback, open offer, delisting, merger)	00.1
Spectrum liabilities	Deferred payments to the government for spectrum; debt-like	07.6
Split grinding unit	Cement grinding plant near markets, fed by clinker from elsewhere; shorter gestation than an integrated plant	05.4
SSSG	Same-store sales growth — revenue growth from stores open more than a year	04.2
Stage 1 / 2	Performing / significant increase in credit risk (30+ dpd) under ECL	07.1
Stage gate	A checkpoint where you decide whether the next, more expensive stage of research is justified · Also: A decision point with a predefined question that must be answered before more time is spent	00.3, 11.2, 15.1
Standalone / consolidated	The legal parent alone / the parent plus all subsidiaries line by line	02.3
Stand-alone selling price (SSP)	Price at which an item would be sold separately; the basis for allocating a bundle's price	02.2
Standalone vs consolidated	Accounts of the listed company alone vs the group including subsidiaries · Also: Parent-only statements vs the whole group's statements	00.2, 02.8, 09.4
Standard layout / mapping	The fixed set of model rows and the rules for placing reported lines in them	10.2
Statement of changes in equity (SOCE)	The roll-forward of every equity component from opening to closing · Also: Primary statement reconciling opening and closing equity by component	02.1, 02.6
STCG / LTCG	Short-/long-term capital gains: ≤ 12 / > 12 months for listed equity	11.5
Steelman	The strongest version of the opposing argument	15.4
Stock replacement	Holding calls (or call spreads) instead of shares to cap downside	11.7
Stock split	Subdivision of shares into more shares of lower face value	01.3
Stock vs flow	A balance at an instant (balance sheet) vs an amount over a period (P&L, cash flow)	02.1
Stress test	A scenario built around a specific adverse mechanism, run through to the balance sheet	10.4
STT	Securities transaction tax	11.5
Subsidiary	A company controlled by another (board control or >50% voting power); consolidated line by line	01.1
Subsidiary / associate / joint venture	Investee that is controlled / significantly influenced (≈20–50%) / jointly controlled with rights to net assets	02.8
Substitute	A different product or technology that meets the same customer need	05.2
Sum-of-the-parts (SOTP)	Valuing each business or stake separately and summing, net of parent debt and costs	06.7
Sunk-cost fallacy	Letting past costs or effort influence a forward-looking decision	11.6
Super-cycle	An extended period of above-mid-cycle prices driven by structural demand or supply shocks	07.3
Supplier finance (reverse factoring)	A bank pays suppliers early and the buyer pays the bank later; disclosed under Ind AS 7 paras 44F–44H · Also: Bank pays suppliers early on the company's behalf; debt presented as payables	02.5, 04.5, 09.4
Survivorship bias	Drawing conclusions from survivors only, ignoring the failures that dropped out of the sample	00.1
Sustainable growth rate	ROE × retention ratio: growth fundable from retained earnings at constant leverage	04.6
Swap ratio	Acquirer shares received per target share in a merger	12.3
Switching costs	Value a customer loses by moving to a competitor	05.3

T

Term	Meaning	Taught in
T+1	Settlement on the next working day after the trade. It makes the ex-date the same as the record date	01.4
Take rate	A platform's revenue as a percentage of the transaction value it intermediates · Also: Fee as a share of transaction value or volume	05.1, 07.2, 07.4
TAM / SAM / SOM	Total addressable / serviceable addressable / serviceable obtainable market	05.2
Target price	A broker's 12-month price estimate, usually a multiple times forward earnings	03.5
Target weights	The long-run intended debt/equity mix at market values	06.2
Tax base	The amount attributed to an asset or liability for tax purposes	02.8
Tax-loss harvesting	Realising losses to offset taxable gains	11.5
Tax shield	The reduction in tax from deductible interest	06.2
Template	A fixed set of questions in document form, used for every case so that cases can be compared	15.2
Temporary vs permanent accounts	Income-statement accounts reset each period / balance-sheet accounts carried forward	02.1
Tender-offer buyback	Buyback at a fixed price with proportional acceptance; 15% reserved for small shareholders · Also: Fixed-price, proportional buyback with a 15% small-shareholder reservation	05.5, 12.3
TER	Total expense ratio charged to a mutual-fund scheme; capped by SEBI in slabs	07.2
Terminal state	The mature economics (growth, margin, capital intensity) the valuation assumes the company reaches	07.4
Terminal value	Value at the end of the explicit period of all subsequent cash flows	06.3
Terminal value share	PV of terminal value ÷ enterprise value	06.4
Term loan / working-capital loan	Long-term secured bank loan for capex / revolving short-term bank facility for inventories and receivables	01.3
Terms of trade	Credit period, guarantees, advances and other non-price terms of a sale	05.4
TERP	Theoretical ex-rights price: \((rP_0 + S)/(r + 1)\)	01.3
Thesis	The three claims, each with a number and a source, on which the case rests	11.3
Thesis-breaker	Pre-committed evidence that would prove the thesis wrong · Also: An observable, dated outcome that would falsify the thesis and trigger exit	00.3, 11.3, 11.5, 15.2
Thesis variable	The driver a position's thesis depends on; the true unit of diversification	11.4
Ticker suffix	.NS (NSE) or .BO (BSE) appended to a symbol for Yahoo-style data sources	00.2
Tie-out	Recomputing a reported number from its inputs to confirm the definition and the data · Also: Rebuilding one statement from the others and reconciling the differences	00.2, 02.6, 10.2
Timebox	A fixed time budget for a task	11.2
Timing identity	Over an asset's life, total expense equals total cash spent; accounting choices only move the timing	02.7
Tobin's q	Market value of assets ÷ replacement cost; q > 1 encourages building, q < 1 favours buying	05.4
Top-down / bottom-up	Investing from macro to stocks / from stocks with macro as input	12.1
Tornado chart	A ranked bar chart of value sensitivity to each input (see 10.4) · Also: Ranked horizontal bars showing each driver's value swing across its range	06.4, 10.4
Total comprehensive income	PAT + OCI; the amount by which equity grows before dividends and share issues	02.3
Total Return Index (TRI)	An index version that assumes dividends are reinvested; the fair benchmark for performance	00.1
Trade receivable	Unconditional right to consideration (only time must pass)	02.2
Trade working capital	Inventories + receivables − payables	04.4
Trading window	Period (quarter-end until 48 h after results) when designated persons cannot trade	01.4
Trailing / forward	Multiples on the last 12 months' actuals / the next 12 months' estimates	06.5
Transaction price	Consideration the company expects to be entitled to, excluding amounts collected for third parties (e.g. GST)	02.2
Transmission	The pass-through of policy rates to lending and deposit rates	12.1
Treasury-stock method	Diluted share count from options: shares issued minus shares repurchasable with the exercise proceeds · Also: Diluted share count from options net of shares repurchasable with exercise proceeds	06.3, 10.3
Treasury-stock method (TSM)	Dilution from options = \(n(1 - K/P)\) for in-the-money options	01.2
Triage	A 3-hour read to state a variant perception and payoff asymmetry · Also: A 3-hour read to find a variant perception, or fail to	11.2, 15.1
Triage / deep dive	A ~3-hour first pass over steps 3–6 / the full ~30-hour research of steps 3–8	00.3
Trial balance	List of all ledger balances; debits must equal credits (a checksum, not a proof of correctness)	02.1
Trigger	A price and an evidence condition that must both hold before buying	15.3
TSR	Total shareholder return = price change + dividends ≈ EPS growth + P/E change + dividend yield	01.5
TTM	Trailing twelve months: the sum of the last four quarters	04.1
TTM EPS	Sum of the last four quarters' EPS; the right trailing measure for seasonal businesses	04.6
Tunnelling	Transferring value from a listed company to entities owned more heavily by its controller	01.1

U

Term	Meaning	Taught in
Unbilled revenue / contract asset	Revenue recognised but not yet invoiced	09.2
Unit economics	The revenue, cost and capital of one representative unit (product, store, customer, loan)	05.1
Unmodified / qualified / adverse / disclaimer	The four audit opinions, in rising order of severity	03.2
UPSI	Unpublished price-sensitive information; trading on it is insider trading under SEBI rules · Also: Unpublished price-sensitive information. Trading on it is insider trading	00.1, 01.4, 05.7
Upside/downside ratio	Probability-weighted gain ÷ probability-weighted loss from the current price	06.8
Useful life	The period over which an asset is expected to be used; Schedule II gives indicative lives	02.7
Useful life / depreciation method	Period and pattern over which an asset's cost is expensed	09.3
US GAAP / ASC	US generally accepted accounting principles, organised in the FASB's Accounting Standards Codification	02.9

V

Term	Meaning	Taught in
VAHAN / SIAM / FADA	Vehicle registration database / manufacturers' wholesale data / dealers' retail data	05.7
Valuation band	Historical range of an index multiple with median and dispersion	12.2
Value chain	The sequence of activities from raw material to end customer, and who captures profit at each step	05.1
Value decomposition	Attribution of value to periods and to individual assumptions	06.3
Value-driver formula	\(V = \text{NOPAT}_1(1 − g/\text{ROIC})/(\text{WACC} − g)\)	06.1
Value-driver terminal	\(\text{NOPAT}_{n+1}(1 − g/\text{RONIC})/(\text{WACC} − g)\)	06.3
Value in use (VIU)	PV of future pre-tax cash flows from an asset or CGU, at a pre-tax discount rate	02.7
Value multiple	\(V/\text{NOPAT}\); equals \(1/\text{WACC}\) when ROIC = WACC	06.1
Value of new business (VNB)	PV of expected profits from policies sold in a period	07.2
Value trap	A stock that looks cheap on multiples but stays cheap or falls because the business is deteriorating	00.1
Variable consideration	Price elements that depend on future events: rebates, bonuses, penalties, returns	02.2
Variable cost	Cost that moves proportionally with volume (materials, freight, commissions)	04.2
Variant perception	The specific point where your view differs from what the price implies, and why you think you are right · Also: A well-founded view that differs from the expectation embedded in the price	00.3, 06.6, 11.3
Version control	Tracking changes to a model over time (git for code; versioned files and change logs for Excel)	10.1
Virtual environment (venv)	An isolated Python installation for a project, so package versions don't clash	00.2
VNB margin	VNB ÷ annualised premium equivalent (APE)	07.2
Volatility drag	Gap between arithmetic and geometric mean returns, ≈ \(\sigma^2/2\)	01.5
Volume effect	Revenue change from selling more or fewer units, at base-year average price	04.1

W

Term	Meaning	Taught in
WACA	Weighted average cost of acquisition of shares by a selling shareholder, disclosed in the offer document	03.5
WACC	Weighted average of the after-tax cost of debt and cost of equity at target market weights	06.2
Warrant	A company-issued option to subscribe to new shares at a fixed price · Also: Right to subscribe to a share at a fixed price; in India ≥25% paid upfront, ≤18 months	01.2, 01.3
Watchlist	Ideas that passed research but await a price or event	11.1
Watchlist deep dive	A deep dive whose output is a buy price and evidence trigger, not a purchase; recorded as such to avoid drift	15.3
Watchlist / re-look price / re-look facts	A company you have researched but not bought / the price that reopens the case / the evidence that reopens it	00.3
Watchlist trigger	A pre-set price or event at which a decision is re-examined	06.8
Weekly expiry	Index option contracts expiring weekly; the focus of SEBI's 2024–25 curbs	07.2
Weighted-average shares	Share count weighted by time outstanding in the period; the basic-EPS denominator	01.2
Whistle-blower / vigil mechanism	Internal reporting channel for fraud; Companies Act s.177(9)	09.1
Window dressing	Arranging year-end balances (cash, payables) to look better than the year's average	09.4
Working-capital change	Cash absorbed (or released) by changes in inventories, receivables, payables and other operating items	02.5
Write-off	Removal of an uncollectible loan from the book	07.1

X

Term	Meaning	Taught in
XIRR	IRR for dated, irregular cash flows, using \((d_i - d_0)/365\) year fractions	01.5

Y

Term	Meaning	Taught in
Yield / cost of funds	Interest income ÷ average loans; interest expense ÷ average borrowings (or deposits)	07.1
YoY / QoQ	Growth versus the same period last year / versus the previous period	04.1
YoY / QoQ / YTD / TTM	Year-on-year; quarter-on-quarter (sequential); year-to-date; trailing twelve months.	03.4

Z

Term	Meaning	Taught in
Z′ / Z″	Altman variants for private companies / non-manufacturers and emerging markets	09.6