Guide to Analysing Companies

A
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Bb
Back-to-back
collateral provided by importers to back credit extended
to them by exporters. In the case of importers in developing
countries, who are buying from developed countries where
they are not known, such collateral will be something like a
bank deposit held abroad by the importer.
Backwardation
When a commodity due for delivery today fetches a higher
price than the same commodity to be delivered at a future date.
Backwardation usually occurs where there are temporary hold-
ups in transport or distribution which make the commodity
temporarily rare and thus push up its price.
Bad debt
A loan or a bill that is not paid within a reasonable time after
its due-by date, often because a borrower has gone bankrupt or
a customer has cash flow problems. Bad debts are an in-
evitable part of business; keeping them under control is an art.
Banks set aside provisions out of their regular profits to
cover the bad debts that they know they will suffer. Provisions
may be general or specific depending on the size and age of the
loan and the rules under which the bank operates. Without pro-
visions, all of a bad debt has to be taken out of profits in the
year in which it occurs.
If you owe the bank $100 that’s your problem. 
If you owe the bank $100 million, that’s the bank’s problem.
J.P. Getty
Balanced (mutual) fund
A unit trust or mutual fund holding a mixed portfolio
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of equities, preference shares and bonds in order to
balance its risk against the potential for return. A balanced
fund usually offers a higher yield than a fund composed en-
tirely of equities and generally performs better when the
stockmarket is falling, or flat. However, a fund made up of
equities, particularly growth stocks, usually does better
when the stockmarket is rising because such stocks generally in-
crease in value.
Balance sheet