Glossary List E

Earnings before interest and tax (EBIT)

Earnings before interest and tax or EBIT is clearly defined as an economic indicator wherein the total revenue of the company is calculated and the operating expenses, excluding those of interest or tax, are deducted from the same.

Earnings before interest, tax and depreciation (EBITD)

Earnings before interest, tax and depreciation is a clear evaluator of the company’s performance during the year. Earnings before interest, tax and depreciation otherwise abbreviated as EBITD is calculated as Revenue - Expenses (excluding interest, taxes and depreciation).

Earnings before interest, taxes, depreciation and amortization (EBITDA)

Earnings before interest, taxes, depreciation and amortization or EBITDA is clearly defined as a measure to evaluate a company’s operational efficiency without bringing in accounting, financial and tax components into the same.

Earnings per share or EPS

Earnings per share or EPS is defined as a portion of profits that are ideally allocated from each and every share available as a part of the common stock. Earnings per share or EPS is a clear indicator of the company’s profitability mode.

Economy

Economy is a geographical location or zone wherein production, consumption and distribution of goods and services take place.

Electronic Clearing Services or ECS

Electronic Clearing Services or ECS is defined as the electronic mode of transmitting payments by banking or financial institutions or by corporate entities. ECS options are widely used to credit employees’ salaries into their respective bank accounts.

ELSS

ELSS popularly abbreviated as Equity Linked Savings Scheme are vibrant investment options offered by mutual fund companies in India. These are diversified open ended investments that offer plenty of tax benefits to investment holders under Section 80C of Income Tax Act 1961.

Employee Stock Option

An employee stock option or ESO is an added privilege of granting shares to certain select group of employees as decided by the company’s top management. An ESO option grants option holders premium equity shares of the company that are priced way lesser than the actual market price.

Entry load

Mutual fund companies usually collect a stipulated amount from investment holders especially while they join a particular investment scheme. This fee is known as the entry load.

Equity capital

Equity capital is referred to as the capital raised by the company by way of public offerings. The shares are issued to the general public at the IPO or Initial public Offering.

Equity index

Equity index is clearly defined as a way of measuring a portion of the stocks as to how these are performing at the market. Mean averages or weighted averages are used to arrive at an appropriate index.

Equity investment

Equity investment is a form of investment which involves buying and selling of shares and securities. Individuals and firms invest their money at the equity markets in anticipation of receiving their dividends and capital gains.

Equity market

An equity market is a market place wherein buying and selling of shares takes place on a large scale across the nation or across a given geographical stock exchange. NYSE or New York Stock Exchange is one of the busiest stock exchanges across the world.

Equity mutual fund

Equity mutual fund is a fund that primarily deals with stocks and shares of different companies. Equity mutual fund provides ample protection to investor’s capital as it invests its core holdings in diversified companies irrespective of size or kind of products they deal with.

Equity share

Equity share is the portion of company’s capital investment accrued in the form of borrowed capital. Equity Shares also provide holders with voting rights.

Escrow account

Escrow account is a temporary transaction held by a third party until the time the transaction in the name of a contract or a deal is settled between two parties directly concerned with the same. The Escrow account is suspended once the formalities regarding the contract or deal are fulfilled and signed off.

ETF (Exchange traded funds)

Exchange Traded Fund or ETF belong to a group of marketable securities that tracks other forms of investments like indexes, commodities, bonds or a basket of account like an index fund. The only difference between an ETF and mutual funds are that the ETF’s purely act like common stock at an exchange parlor.

EUR

EUR is the symbol for European currency denoted by EUR. EUR is also known as a Euro.

Eurobond

Eurobond is denominated in a currency that is not the home currency of the country or the market place where it is issued in. These bonds are also known as Euro-yen bonds.

Ex-dividend

Ex-dividend are dividends on those trading shares classified from the seller’s point of view and not the buyers. Ex-dividends are dividends mostly encashed by sellers. Moreover, if the ex-dividend issuing company confirms a person to receive such dividend payments, only the aforesaid person can receive the same from the company.

Exit load

Exit load is usually a commission or a fee mutual fund companies charge from the investor for leaving or exiting from a scheme. It can either be an independent scheme like a Life Insurance or a group scheme like PPF (Public Provident Fund).

Ex parte award

When a person who is a part of a juridical affirmation or a legal suit has not received notice by the court and therefore he/she chose not to attend the proceedings, the aforesaid party becomes an ex-parte. If the person does not attend the hearing and the judgement is in favor of the application as submitted to the court, the ex-parte nominee receives an award that is known as ex-parte award.

Exponential moving average or EMA

Exponential moving average is a statistical measure very similar to a moving average where the data is tabulated accordingly. The only difference between a simple moving average and that of an EMA is that more weight is given to the latest data. This measure is also known as the exponentially weighted moving average.

Exports

When a country supplies raw materials or finished products to another foreign or overseas nation, the supplying country becomes the exporter and the tangible goods and services supplied are classified as exports.

Exposure

Exposure is a quantified percentage of access given to investor holders or equity shareholders at the common market-place. An equity share holder gets better exposure to the share market if the quantum of investment is on the higher side.