Guide to Analysing Companies

Bill of exchange
A written instruction to a buyer (an importer) to pay a seller (an
exporter) a defined amount of money before a certain date. In
the UK, a cheque is a bill of exchange and is still governed in
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BILL OF EXCHANGE
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important respects by the Bill of Exchange Act of 1882. In the
United States, a bill of exchange usually refers only to a foreign
transaction. There, a written order from one party requesting
another to pay a certain amount to a third party is a draft.
Bill of lading
The set of documents relating to goods while they are in transit.
The documents contain a brief description of the goods and
where they are going. The bill of lading is signed by the carrier
who, on receipt of the goods, gives the bill to whoever the
shipper (the owner of the goods) has instructed. Usually the
shipper instructs a forwarding agent or broker to handle the
formalities. Where payment for the goods is by letter of
credit, the money will only be made available if the bill of
lading conforms to the conditions laid down in the letter of credit.
Black Monday
stockmarket history is riddled with black days. Black
Monday was October 19th 1987, when virtually all the world’s
stockmarkets tumbled by all-time record amounts. Black
Tuesday was October 29th 1929, the blackest day of the Great
Crash. Others talk of Black Thursday, October 24th 1928, when
the markets first began to fall abruptly.
Black-Scholes formula
A model for pricing options developed by Fischer Black and
Myron Scholes, two Chicago academics. To gauge whether an
option is fairly valued, the model considers such things as the
volatility of a security’s return, the level of interest
rates, the relationship of the price of the underlying share to
the strike price of the option, and the amount of time before
the option expires. Black and Scholes came up with their theory
in 1975, the year that formal trading in options began on the