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The Times 100: The Best Companies In California : Industry Report Card : Buzzwords

April 24, 1988

BALANCE SHEET--A snapshot of a company's financial condition, generally at the end of a month, quarter or fiscal year. Lists assets, liabilities (what a company owes others) and shareholder's equity (ownership stake of stockholders).

BOOK VALUE--Generally the same as shareholder's equity or net worth, which are assets minus liabilities.

CAPITAL--Meaning varies: amount that stockholders have invested in a business, amount raised by stockholders plus amount those investors have raised by borrowing or actual physical facilities used to produce a product or service (i.e., "capital investment").

LEVERAGE--Often refers to the amount of debt in a company compared to the amount of equity capital, or shareholder's money invested in a company.

PRICE-EARNINGS RATIO--The price of a company's stock divided by its earnings per share. Often used by investors to judge whether a stock is selling cheaply or not, but an imperfect measure.

PRODUCTIVITY--Measure of efficiency. Often refers to how much workers produce for each hour that they work. Sometimes measured by sales or profits per employee.

RESTRUCTURING--Corporate overhaul that takes many different forms: selling off or acquiring new businesses, laying off workers or a "recapitalization" that involves changing a company's proportion of debt to equity.

STOCK SPLIT--In a 2-for-1 split, for example, you would get one additional share of stock for each you already own, but the price of each share would be cut in half.

WRITEOFF, WRITEDOWN--Eliminations or reductions in the value of assets. Firms may discover that assets are not worth as much as anticipated or are virtually worthless. Profits are reduced.

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