Guide to Analysing Companies

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statements), customers still sometimes find it hard to trace
exactly what they are being charged for.
Charge card
A plastic card that allows its owner to buy goods before paying
for them. Department stores issue charge cards to customers that
apply for them. The customers can then spend as much as they
like in the store until the day each month when they have to pay,
in full, the outstanding debt charged to their card. Some charge
cards have a credit facility, which allows the repayment to be
spread over time. (See also credit card and gold card.)
Chartism
See technical analysis.
Cheque
A bill of exchange drawn on a bank and payable on
demand, although it usually takes three or four days to clear
(see next entry). Despite the increasing use of plastic
cards, direct transfers of funds and automated teller
machines, cheques are still widely used, by both companies
and individuals.
 A cheque is “stopped” when a bank refuses to clear it,
that is, refuses to transfer the funds as requested (often
because the funds are not there). The bank then returns
the cheque to the branch it came from.
 A post-dated cheque is one with a future date on it,
before which it cannot be cleared.
 A crossed cheque can only be paid to a payee’s bank
account; it cannot be paid in cash.
 A blank cheque is one where the amount to be paid is
left blank, to be filled in by the payee.
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Cheque clearing
The process by which banks (and, increasingly, specialist con-
tractors working for banks) debit and credit the accounts
of customers on which cheques are drawn. A has an account
with bank X; B has one with bank Y. When A writes a cheque to
B, the cheque passes between bank X and Y. The banks then
clear it by debiting X’s account and crediting Y’s account.
Cheque clearing began in the coffee houses of London’s
Lombard Street where clerks gathered to exchange pieces of
paper. These days, most of the work of transferring funds is
done by computers. Even so, most transactions still, mysteri-
ously, take three or more days to clear.