Ace

Manager 4 The Passing Shot

Glossary

ACE: Legal tender used in Universe City ACID-TEST RATIO: (Current assets Inventories)/ Current liabilities ANNUAL PAYMENT: In a loan, amount to be annually cashed-out by the borrower when the loan is annually amortized. The amount includes principal payment and interests. ANNUITANT: Person entitled to receive benefits from an annuity ANNUITY: Insurance contract designed to provide payments to the holder at predefined intervals. BBL: Barrel BETA: Coefficient measuring the marginal contribution of a financial asset to the risk of the market portfolio and equal to COV (RA,RM) / V(RM) where RA is the financial asset return and RM the market portfolio return. This coefficient reflects the sensitivity degree of the financial asset return to the variations of the market portfolio return. BRENT: Originally name of an oil field off the coast of Scotland. Brent is the acronym of Broom, Rannock, Etive, Ness and Tarbert, main oil fields in the North Sea. One of the standards used to fix oil price in the World. BS: Black-Scholes BOOTSTRAPPING (OR BOOTSTRAP METHOD): Method used to construct a fixed-income yield curve from the prices of a set of coupon-bearing products by forward substitution BUNDLING: Combination of services in a PPP, typically embedding the design, the construction, the maintenance and the financing of the infrastructure CALL OPTION: Derivative product providing the buyer with the right (and not the obligation) to buy a financial asset at a specified price (called the strike price) CAPEX: Capital Expenditures

CAPM: Capital Asset Pricing Model CASH RATIO: Cash/Current liabilities CDO: Collateralized Debt Obligation CEO: Chief Executive Officer CERTIFICATE OF DEPOSIT (CD): Promissory note issued by a bank CIB: Corporate and Investment Banking COMPLIANCE: Act of adhering to and of enforcing a standard or a regulation COST TO INCOME RATIO: General Expenses / NBI CUSTOMER SEGMENTATION: subdivision of a market into discrete customer groups sharing similar characteristics CURRENT RATIO: current assets/current liabilities D&A: Depreciation and Amortization D/E Ratio: Debt Equity Ratio DCF: Discounted Cash Flows DILUTION/ACCRETION: Decrease/Increase in the financial participation held by a shareholder as a result of a capital increase. DISCOUNT RATE: Rate at which FCF are discounted to compute Present Value DSCR: Debt Service Coverage Ratio EBIT: Earnings Before Interests and Taxes EBITDA: Earnings Before Interests, Taxes, Depreciations and Amortizations EONIA: Euro Over Night Index Average EUROPEAN OPTION: Option contract where the right can be exercised at a specified date only EXCHANGE RATIO: Number of shares of the acquiring company a shareholder receives for one share of the acquired company

EPS: Earnings per Share EV: Enterprise Value. Corresponds to the market value of the operating assets of a company and usually equal to the equity value increased by the value of the net financial debts. FCF: Free Cash Flows FORWARD CONTRACT: commitment to trade a specific asset at a specified price at a future date FUTURES: standardized contract between two parties which agree to exchange in the future a fixed quantity of a specified asset at a price agreed today. GARP: Growth at Reasonable Price GEARING: Net debt to Shareholders Equity ratio HEARTS: Legal tender used in Rose City IFRS: International Financial Reporting Standards INSTALLMENT: Regular payment a borrower agreed to make to a lender. INTEREST COVERAGE RATIO: EBIT/ Interest Expenses IPO: Initial Public Offering. LIBOR: (London Interbank Offered Rate) Money market observed rate in London. Libor is the arithmetic mean of interest rate offered by banks on deposits from other banks for a given maturity and a given currency. LONG POSITION: Investment strategy on a financial asset (stock security, fixed income security, option, etc.) where the investor is exposed to a downside risk of the asset value. Investors taking a long position on one particular asset are buyers who become owners of that asset. In the context of option contracts, investors taking long positions are therefore the buyers of the option and as such, are exposed to a risk of decrease in the option value. M&A: Mergers and Acquisitions MARKET-TO-BOOK RATIO (MTB): Market value per share/Book value per share MARKETABLE SECURITIES: very liquid securities with a typical maturity of less than one year. MARKET CAPITALIZATION: share price multiplied by the total number of shares

MARKETING MIX: Marketing concept the objective of which is to create awareness and customer loyalty. Mix relies on 4 variables (the four P's): price, promotion, product, and placement. MFI: Microfinance Institutions MICROFINANCE: Financial services offer dedicated to people who usually are excluded from the financial system. MM: Modigliani Miller MOU: Memorandum of Understanding NBI: Net Banking Income NET DEBT: Financial debt Cash and Cash equivalents NET WORKING CAPITAL TO ASSETS (NWCTA or NWTC Ratio) RATIO : Net working capital/Assets NW: Net Worth NWC: Net Working Capital NET WORKING CAPITAL: current assets current liabilities NET WORTH RATIO: total assets divided by book value of stockholders equity NPV: Net Present Value NOPAT: Net Operating profit After Taxes OPERATIONAL SELF-SUFFICIENCY: Income/Charges OPEX: Operating Expenses OPTION: contract or agreement to buy or sell an asset (called underlying asset) at a certain future price. There are two basic types of options. A Call option gives the holder the right but not the obligation to buy the underlying asset by maturity. A Put option gives the holder the right but not the obligation to sell the underlying asset by maturity. OVERDRAFT: It is the fact of overdrawing a bank account, resulting in a negative cash balance. Overdraft is often associated with overdraft fees. PAR: Portfolio At Risk

PAYOFF: Final benefit generated by a financial contract PEG: Price Earning Growth equal to PER divided by annual EPS growth. PER: Price Earnings Ratio. Equity Value multiple equal to the equity market value divided by the net income. PERPETUAL GROWTH RATE: Annual rate of growth at which cash-flows are supposed to grow for ever after the investment horizon. PERPETUITY FACTOR: see PERPETUAL GROWTH RATE PPE or PP&E: Property Plant and Equipment PPP: Public Private Partnership, public service funded and operated through a partnership between a public authority and a private operator PRINCIPAL PAYMENT: In a loan, the principal payment is the amount of borrowed capital reimbursed at each period by the borrower to the lender. PRINCIPAL AGENT PROBLEM: Issues arising in the relations between a Principal and an Agent in case of information asymmetry, and / or moral hazard mainly because the agents actions are not observable by the Principal. PROFIT MARGIN: Net income/ total Sales PSB: Public Sector Benchmak, in a PPP pattern that enables to compute the NPV of costs as if the infrastructure was built through a public authoritys procurement. PSDR: public-sector discount rate PUT OPTION: Derivative product providing the buyer with the right (and not the obligation) to sell a financial asset at a specified price RETURN ON ASSETS: Net income/Total assets RETURN ON EQUITY: Net income/Total equity RISK FREE ASSET : asset the actual return of which is always equal to its expected return. Risk free assets exhibits no default risk. RISK FREE RATE: Interest paid on a risk free asset

ROCE: Return on Capital Employed ROA: Return on assets ROE: Return on Equity SHORT POSITION: Investment strategy on a financial asset (stock security, fixed income security, option, etc.) where the investor is exposed to an upside risk of the asset value. Investors taking a short position on one particular asset are vendors who committed to sell that asset. In the context of option contracts, investors taking short positions are therefore the vendors of the option and as such, are exposed to a risk of increase in the option value. SOLARIS: Short form of Solaris Omni Co. SPREAD / CREDIT SPREAD: Difference between the interest rate at which the debt is issued and the risk free rate. The credit spread reflects the level of risk of a given debt security and normally depends on the degree of solvability of its issuer. SPV: Special Purpose Vehicle STRIKE PRICE: Price at which the right provided by the option contract can be exercised STRUCTURED PRODUCT: pre-packaged investment strategy based on derivatives SWAP: contract specifying an exchange of financial assets or flows between two entities during a certain period of time TOTAL ASSET TURNOVER: total sales divided by total book value of assets TV: Terminal Value UC: Universe City UCA, UC Air: Universe City Airlines UCE: Universe City Electricity UNPAID BALANCE: In a loan, amount due to the lender once the principal of the period has been paid US OPTION: American option. Option contract where the right can be exercised for as long as the option remains valid UTILITY FUNCTION: satisfaction level of an investor

WACC: Weighted Average Cost of Capital WC (or NWC): Working Capital (also called Net Working Capital) ZWIX: Currency of Swordandania