This financial glossary of terms is intended to explain terms of particular relevance to Caspian Energy Inc. and its business.
These are a range of indices that investors sometimes use to assess how well Caspian Energy Inc. is performing. They usually include stock market indices like the FTSE 100, FTSE All-Share and the FTSE SmallCap.
A transaction in which a business, business unit (such as a subsidiary or division of a larger business) or company is acquired from the current shareholders where the buyer includes the existing management team, the transaction is a management buyout; where it involves a new management team, it is a management buy-in; and where the buyer is an investing institution (or group of institutions) that subsequently puts a management team into the acquired business, the transaction is an institutional buyout.
These are the total capital (rather than revenue) gains/losses made during the period. If an investment is sold there is a realised capital profit/loss. If an investment is held at the end of the period, then the gain/loss is unrealised.
Mainland Europe (i.e. excluding the UK) including the Nordic region.
See growth capital below.
Capital provided to businesses that have completed the product development stage and require further funds to initiate commercial operations and sales. Contrast with start-up capital.
Equity uplift over value
This is the difference between the amount received in respect of the equity portion of an investment when it is sold and its valuation in the accounts at the previous year end.
Liquidation of an investment. Among the various methods of exiting an investment are: trade sale, sale of shares in an IPO, write-offs, repayment or redemption of preference shares or loans, sale to another venture capitalist or private equity provider or sale to a financial institution.
A basis of valuation for investments. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
Growth capital (or development capital)
Investment capital provided for the growth or expansion of an established business, which may be used to finance acquisitions, fixed assets, market or product development and / or provide additional working capital. Capital provided for recovery situations is also included in this category, as is the refinancing of bank debt.
Initial Public Offering - the first time a company's shares are traded on a stock market.
The internal rate of return is a common measure of returns presentation for private equity and venture capital investments and funds. The IRR is the annualised implied discount rate (effective compounded rate) which equates the present value of all of the appropriate cash inflows associated with an investment with the present value of all the appropriate cash outflows accruing from it.
A company that has been admitted to the Official List of the London Stock Exchange or overseas equivalent
An agreement not to sell shares held for a specified period post IPO.
Mergers and acquisitions
Net asset value (NAV) per share
Shareholders; funds (net assets) divided by the aggregate of the number of shares in issue at the balance sheet date. The diluted NAV per share is calculated by adjusting both the net assets and the number of shares for the effect of share options and other financial instruments convertible into shares (such as convertible loan stock). For example, where an employee exercises share options, the cash received from the employee increases the net assets, but the number of shares in issue also increases.
New issues market
The new issues market encompasses the shares of companies being admitted to a stock exchange for the first time. These companies usually achieve a listing on a stock exchange by means of an IPO.
Price Earnings (P/E) ratio
The market price per share of a business divided by its earnings per share. By calculating a P/E ratio, we are able to compare businesses of different sizes. Differences in P/E ratios mainly reflect the market's assessment of differences in earnings growth prospects and risk. The P/E ratios of quoted companies are often used to help value private companies.
Buyouts and growth capital.
A potential loss on an investment where it is expected that the underlying company may fail within the next 12 months.
Public to private
A transaction which results in a quoted company delisting as an unquoted company.
A company whose securities are traded on a public stock exchange.
Sale of an investment for cash
Realised (capital) profit
When cash is received for an investment, the difference between the cash received and the valuation at the previous year end.
This is cash received on the sale of an investment.
Revenue profit after tax
This is dividends, interest income, fees and other income, less interest payable, administration expenses and tax (excluding any such items of a capital nature).
The amount of cash originally invested by our shareholders together with cumulative retained profits since the company was established.
The Statement of Recommended Practice: Financial Statements of Investment Trust Companies. The SORP sets out recommendations, intended to represent best practice, on the form and contents of the financial statements of investment trust companies.
Capital provided to start-up businesses for use in product development and initial marketing. These businesses may be in the process of being set up or may have been in business for a short time, but have not sold their product commercially.
This is Caspian Energy Inc. total profit/loss before dividend payable for the period.
The sale of a business to a company typically operating in the same or related industry sector.
A company whose securities are not traded on a public stock exchange.
Unrealised value movement
The change in value of the year-end portfolio during the year.
The value at which investments are held in the accounts. Valuation is a complex subject in the private equity and venture capital sector.
Start-up capital and early stage capital provided to businesses engaged in technology development or life sciences research.
The amount of value lost when a portfolio company goes into receivership, administration or liquidation in the year.