Glossary Financial Terms
G - I Gearing
Refers to the process of increasing funds
available for investment through borrowing. the ratio of debt
finance to equity finance or as: The use of long-term debt in
financing an entity. Gearing may be measured as EBIT /EBIT -
Interest . Used to be known as Leverage.
Government bond
A debt security issued by the government.
Interest is usually paid twice yearly at a fixed rate for the
life of the bond, usually 10 years.
Growth
The capital appreciation of a company or
trust price rather than the returns from income via dividends.
Gross income
The total amount of income earned (from
wages or a salary) before any deductions including tax.
GST (Goods and Services Tax)
The GST is a broad- based tax of 10 per cent
on most supplies of goods and services consumed in Australia. On
1 July 2000 the GST replaced wholesale sales tax which was
applied at varying rates to a range of products (as per ATO
website).
H Hedge
A transaction which reduces or offsets the
risk of a current holding.
I Income
Any money a person receives.
Inflation
An increase in the price of goods and
services. This means that prices generally rise.
Insurance
Financial protection against financial loss;
an arrangement where an insurance company agrees to pay an
amount of money to the insurance policy holder if a defined
event occurs, in exchange for an insurance premium being paid.
Insurance premium
The payment made to an insurance company in
exchange for protection or financial help if (agreed)
circumstances or events occur.
Interest
Payment for the use of money; the return
earned on invested funds; the amount a borrower pays to a lender
for the use of the borrowed money.
Interest free period
The time allowed, usually 55 days, in which
new credit card purchases can be paid off without being charged
interest, provided there are no unpaid amounts on the card from
previous payment periods.
Interest rate
The relationship between the amount of money
borrowed or lent and the money paid in return for the use of
that money. Usually expressed as a percentage per year.
Investment
An asset acquired for the purpose of
producing or generating income or capital gains for its owner.
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