|Earnings: The profit a company makes
after all expenses and taxes. This term is
sometimes confused with a company's revenue, which
is their total sales. Earnings are equal to a
company's sales (after returned merchandise) minus
the cost to produce goods for sale or purchase the
inventory sold, minus all overhead and taxes.
|Earnings per Share: Also known as EPS,
this is the company's net profit, after taxes,
divided by the number of shares of stock in
|Easement: An agreement providing one
individual or business with the right to use land
owned by someone else. In the case of real estate
trans- actions, long-term easements can affect the
value of a property if they interfere with the
potential usage of the land. One example of an
easement is an agreement between a land-owner and
the telephone company to permit the installation
of telephone poles on the land.
|Economies of Scale: The improvements in
a company's operational efficiency as a result of
savings from purchasing inventory in volume, the
division of labor, and the learning curve.
|80-20 Rule: Business experience that
indicates that 80% of a company's revenue will
come from just 20% of its total customer base.
|Encumbrance: Any agreement involving
the use of land that does not prohibit its sale,
but which may reduce its value. An easement is one
type of encumbrance. Other common encumbrances
include liens and mortgages.
|Equity: The value of ownership after
deducting any amounts owed.
|Equity Financing: Raising money by
issuing stock, thereby offering part ownership in
the company in return for an investment.
|Equities: A fancy name for stocks.
|Escrow Money: Assets held by a third
party until the conditions of a contract are
satisfied, at which time they are paid out.
|Estate: A person's total property at
the time of their death.
|Estoppel: A legal situation barring one
individual or business from denying the existence
of contracts or agreements when it is clear that a
contract exists. Such situations can arise after
one individual realizes that the terms of a signed
contract is detrimental to his or her business and
claims that the contract is invalid. An estoppel
comes into play when the court recognizes that the
contract exists and prevents the individual from
trying to deny its existence as part of a legal
|Exchange Rate: The price at which one
country's currency can be converted to another
|Ex-dividend Date: The date where the
owner of the stock on the prior day is entitled to
the currently declared dividend to be paid.
|Expense Ratio: The percent amount that
investors in a mutual fund pay for one year. A
fund may sometimes change this amount, which will
include any 12b-1 fees. The published figures on a
fundís performance have all expenses already
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