Guide to Analysing Companies

Automated teller machine
A machine that can carry out most of the functions of a bank
teller or cashier. Automated teller machines (atms) have come
a long way since cash dispensers were first fitted to the outside
walls of banks, allowing customers to withdraw money when
the branch was closed. Banks’ atms are found in supermarkets,
restaurants and football stadiums – most places, in fact, where
people may want to spend cash. In partnership with retailers,
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some banks are also using atms to get even closer to their cus-
tomers, by advertising a range of products and services.
Aval
A French word meaning endorsement. A sort of continental Eu-
ropean acceptance; a guarantee stamped on a bill of
exchange. It guarantees that a trusted party (such as a bank)
will meet the liability if called upon. The bank usually signs
or stamps its name under the words 
Pour aval or Bon pour aval.
Average cost
See marginal cost.
Averaging
A way of buying more of a certain security as its price falls,
in order to reduce the average cost of the security. It can apply
to a simple transaction where, for instance, an investor buys
1,000 shares in ABC company at $5 each on one date and a
further 1,000 at $4.50 the following week. The average price for
the two purchases would therefore be $4.75. Averaging can also
apply to a regular savings plan under which an investor puts,
say, $100 a month into a unit trust. When the price of the
units is low, that $100 will buy more such units than when the
price is higher. Over a year, the cost of the investment is there-
fore the average price paid for the total number of units. This is
called pound, dollar or euro cost averaging.