What is Free Float Market Capitalization: Definition & Meaning Explained

Bottom Line in Finance

Bottom line in finance is used to refer to a company’s crucial metrics like earnings, profits, net profits, earnings per share (EPS), and others.

Any move or action that can impact a company’s profit or net profit in a positive or negative direction is also referred to as the bottom line.

“Bottom line” is called such because the crucial metrics of a company are generally found at the bottom of a financial statement.

Government Bonds

Government bonds are debt instruments that allow the central banks to raise capital to finance operations. The types of government bonds are:

Treasury Bills
Fixed Rate Bonds
Floating Rate Bonds
State Development Loans
Sovereign Gold Bonds
Zero Coupon Bonds

Every government bond has a credit rating that’s based on the financial health of the country. The government is the apex institution of any country, which is why their credit rating is the high.

In India, you’ll notice government bonds with the credit rating SOV. This is known as a sovereign rating.

Autoregressive Model

An autoregressive model uses one or more past values to forecast the current value of an asset.

The model assumes that past values can have an impact on the current value but the number of past values it takes into account can vary.
For example, an AR(1) model will use one preceding value, an AR(2) model will use two preceding values, and so on.

Indices

Indices are a collection of financial instruments that measure the performance of those very instruments.

For example, stock market indices like Nifty 50 and Sensex measure the top 50 and 30 stocks by market capitalization.

If indices go up, it generally means that the underlying stocks are performing well. The opposite is true when indices plummet.

By the way, there’s no limit to how many instruments an index can track. The Nifty Smallcap 250 tracks 250 stocks whereas Nifty Bank tracks 12 stocks.

Follow On Public Offer

A Follow On Public Offer or FPO allows a publicly traded company to issue more stock to public investors. FPOs are similar to IPOs because FPOs allow companies to raise additional capital through the public market.

For an FPO to be possible, a company must have already done an IPO. FPO shares are typically issued at a discount by a company whose track record is already clear because they are publicly traded.

Free Float Market Capitalization