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Straight-line depreciation


Definition: A method of calculating an asset’s annual depreciation which is accomplished by taking the asset’s original cost, subtracting the value the asset will have when the company no longer has use for it (ie, salvage value), and dividing the result by the useful life of the asset.

Stock split


Definition: An operation a corporation carries out to lower the price of each share of its stock while simultaneously granting shareholders a number of shares that will fully offset the drop in the share price.



Definition: An investment that gives the buyer ownership in a corporation. There can be different types of ownership, but all corporations issue common stock. They may also issue preferred stock.



Definition: The difference, in cents, between the highest bid among potential buyers of a stock and the lowest price being asked among potential sellers of the stock.

Shares outstanding


Definition: The total number of shares of common stock of a corporation that are held by its directors, executives, employees, and the investing public. Example: PBL Corporation has granted 50,000 shares of its stock to its directors, 250,000 shares to its executives and employees, and 3,000,000 shares to the public. Adding them up, we get

Share buyback


Definition: A formal decision and announcement made by a company to commit a certain amount of its cash to repurchasing its shares on the open market in the months and years ahead.



Definition: The smallest unit of company ownership that can be purchased from a corporation and later bought and sold among investors.