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Finance GlossaryMutual Fund
Mutual Fund
Definition of Mutual Fund
A mutual fund is a financial instrument that collects funds from investors and invest in different assets, like equity, bonds, etc. A professional fund manager handles the investments, making it easier for individuals to invest and spread their risk without needing deep market knowledge.
Related Terms
Yield to Maturity (YTM)
Yield to Maturity is the total return an investor can expect if a bond is held until maturity, accounting for interest payments and any gain or loss if purchased at a discount or premium. For example, buying a bond below face value increases its YTM beyond the coupon rate.
At The Opening
At the opening is an instruction to execute an order at the open price, which is the price of a security at the start of regular stock market hours.
Zero-Coupon Bond
A zero-coupon bond is a debt instrument that does not pay periodic interest but is issued at a deep discount to its face value. Investors earn returns when the bond matures at full value, such as purchasing a ₹1,000 bond for ₹700 and receiving ₹1,000 at maturity.
Limit Order
A limit order is an instruction that specifies the price at which a financial security should be bought and sold known as the limit price. The broker will execute the order only if the limit price is met. But there is no guarantee that a limit order will be executed since it is essentially in queue.
EBITDA
EBITDA is short for Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA allows investors to understand cash flow from all operations while excluding certain non-cash expenses related to interest, depreciation, amortization, and taxes.
That’s why investors use EBITDA as a valuation technique to determine the profitability of a company. Interestingly, EBITDA is a variation of operating income which is known as EBIT.
While there are many ways to calculate EBITDA, the most common methods include:
1) EBITDA = Net Income + Taxes + Interest + Depreciation + Amortization 2) EBITDA = Operating Income + Depreciation & Amortization
That’s why investors use EBITDA as a valuation technique to determine the profitability of a company. Interestingly, EBITDA is a variation of operating income which is known as EBIT.
While there are many ways to calculate EBITDA, the most common methods include:
1) EBITDA = Net Income + Taxes + Interest + Depreciation + Amortization 2) EBITDA = Operating Income + Depreciation & Amortization
Total Shareholder Return (TSR)
Total Shareholder Return (TSR) measures the overall return generated for investors, combining share price appreciation and dividends received over a period. It provides a more complete view of performance than price returns alone. TSR is commonly used to evaluate long-term value creation and management effectiveness.
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