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As an accounting and finance
professional, you are, undoubtedly, a numbers person. That distinction certainly
serves you well when it comes to your day-to-day duties. But, when it's time for
a job interview or a networking event, knowing how to crunch digits won't necessarily
come in handy. You also need an impressive, and, perhaps more important, accurate,
financial vocabulary.
Even if you feel you have
a pretty decent grasp of our industry's difficult jargon, it never hurts to give
yourself a refresher course every now and then. New expressions are injected into
the financial vernacular almost on a weekly basis and yesterday's buzzwords have
a way of phasing out quickly. Pay close attention to industry publications and
make it a point to learn a few new words a month.
But, for those of you who
don't know their asset from their LBO (that's, leveraged buyout), here's a brief
introduction into the interesting, if not absurd, world of "finance speak"…
Backwardation and Contango
Backwardation refers to a condition of the market in which futures prices are
actually higher in the nearest delivery month than they are in the distant delivery
month. Contango is simply the opposite situation of Backwardation (no, it's not
sometimes referred to as "Backwardbackwardation.")
"Godfather"
Offer
Anyone familiar with the movie probably can make a pretty good guess on this one.
A Godfather offer is a hard line approach to a takeover where the purchasing party
makes the target company — you guessed it — an offer they can't refuse.
Usually the offer is so large that the target company must accept simply to avoid
litigation or shareholder upheaval. Although it is not necessary, a Godfather
offer may be made while wearing a tuxedo and stroking a cat.
Shark Repellent
Shark repellent is often used in risk arbitrage when a target company does something
to deliberately devalue itself as protection from aggressive takeover parties
(i.e., sharks). Examples include other interesting terms like, "scorched-earth
policy" and "poison pills." In conversation, one might say, "Those
guys were about to make a 'Godfather offer' before the target used some serious
'shark repellent.'"
Zombie
In folklore, the term zombie is used to refer to the living dead. In the finance
world, it's an insolvent and bankrupt company that continues to operate despite
a pending merger or closure. People who work at such companies need not wear tattered
clothing, pale makeup and stagger around with their arms stretched out in front
of them.
Yes, the language of finance
is indeed a fascinating one. If you'd like to become more fluent, brush up on
your vocabulary, or simply look up a word you heard or read somewhere, we urge
you to check out the "Money
101 Glossary".
And, if you need to speak
to someone about your accounting or financial staffing needs, get in touch with
your local
Ajilon Finance Account Manager today. They look forward to talking to you.
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