Glossaire M&A et Private Equity

IAS, or International Accounting Standards, refers to a set of international accounting standards developed by the International Accounting Standards Committee (IASC). These standards aim to harmonize accounting practices globally, thereby facilitating the comparability and transparency of financial statements of companies operating in different countries. The IAS cover various aspects of accounting, such as revenue recognition, financial statement presentation, and the accounting for assets and liabilities. In 2001, the IASC was replaced by the International Accounting Standards Board (IASB), which continued to develop new standards under the name of International Financial Reporting Standards (IFRS). However, the existing IAS remain in effect until they are replaced or revised by the IFRS. The adoption of IAS/IFRS is mandatory in many countries, particularly within the European Union, thereby enhancing the consistency and reliability of financial information on an international scale.

The IAS Foundation (International Accounting Standards Foundation) is a non-profit organization that plays a crucial role in the development and promotion of international accounting standards. Created to support the work of the International Accounting Standards Board (IASB), the foundation aims to ensure the transparency, comparability, and quality of financial statements on a global scale. By facilitating the adoption of the International Financial Reporting Standards (IFRS), the IAS Foundation contributes to the stability and efficiency of international financial markets. It also works towards the harmonization of accounting practices, enabling investors and other stakeholders to make informed decisions based on reliable and comparable financial information. Thus, the foundation plays an essential role in strengthening market confidence and promoting global economic growth.

The IASB (International Accounting Standards Board) is an independent body responsible for the development and publication of international accounting standards, known as International Financial Reporting Standards (IFRS). Founded in 2001 and based in London, the IASB aims to harmonize accounting practices globally, thereby facilitating the comparability and transparency of companies’ financial statements. IFRS standards are adopted by many countries and are particularly important for multinational companies and international investors. The IASB works closely with various regulatory bodies, accounting professionals, and stakeholders to ensure that the standards meet the needs of financial markets and reflect best practices in accounting.

The acronym IBO can refer to several concepts in finance and management, but it is often used to denote « Initial Bond Offering. » An IBO is a method by which a company or a government entity issues bonds for the first time to raise funds in the financial markets. Unlike stocks, bonds are debt securities that obligate the issuer to repay the principal with interest on specific dates. IBOs are crucial for financing long-term projects, restructuring existing debts, or diversifying funding sources. They offer investors an opportunity to obtain fixed returns while diversifying their portfolio. The conditions of an IBO, such as the interest rate, duration, and guarantees, are determined by the issuer based on market conditions and its creditworthiness.

IBR, or « Incremental Borrowing Rate, » is a crucial financial term within the framework of IFRS 16 and ASC 842 accounting standards related to lease contracts. The IBR represents the interest rate that a company would have to pay to borrow funds over a similar term and with comparable collateral to that of the lease contract, in a similar economic environment. This rate is used to discount future lease payments to determine the present value of lease obligations. Accurate determination of the IBR is essential as it directly influences the amount of lease liabilities and assets recorded on the balance sheet, thereby impacting financial ratios and the perception of the company’s solvency. Companies often need to consult experts to estimate the IBR, taking into account factors such as market conditions, the term of the contract, and the company’s credit profile.

An Initial Coin Offering (ICO) is a fundraising method primarily used by startups in the blockchain technology and cryptocurrency sectors. During an ICO, a company issues digital tokens in exchange for capital, often in the form of cryptocurrencies like Bitcoin or Ethereum. These tokens can represent various rights, such as access to a future service or product, or even a stake in the company. ICOs are comparable to Initial Public Offerings (IPOs) but are less regulated, which can offer opportunities for high returns while also carrying significant risks, particularly in terms of fraud and volatility. Investors must therefore exercise due diligence before participating in an ICO. Since their popularization in 2017, ICOs have revolutionized the financing of blockchain projects, although their use has been tempered by increased regulations and alternatives like Security Token Offerings (STOs).

An Initial Coin Offering (ICO) is a fundraising method primarily used by startups in the blockchain technology and cryptocurrency sectors. During an ICO, a company issues digital tokens in exchange for capital, often in the form of cryptocurrencies like Bitcoin or Ethereum. These tokens can represent various rights, such as access to a future service or product, or even a stake in the company. ICOs are comparable to Initial Public Offerings (IPOs) but are less regulated, which can offer opportunities for high returns while also carrying significant risks, particularly in terms of fraud and volatility. Investors must therefore exercise due diligence before participating in an ICO. Since their popularization in 2017, ICOs have revolutionized the financing of blockchain projects, although their use has been tempered by increased regulations and alternatives like Security Token Offerings (STOs).

The ICR, or Interest Coverage Ratio, is a key financial indicator used to assess a company’s ability to meet its interest obligations on its debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses. A high ICR indicates that the company generates enough revenue to cover its interest expenses, which is a sign of financial strength. Conversely, a low ICR may signal potential difficulties in repaying debt, thereby increasing the risk of default. Investors and creditors use this indicator to evaluate a company’s solvency and financial stability. An ICR above 1 is generally considered acceptable, but a higher ratio is preferable for better financial security.

IDR, or Income Distribution Index, is a financial indicator used to assess the distribution of income within a company or an economy. It measures the proportion of generated income that is distributed in the form of dividends to shareholders, salaries to employees, and payments to creditors. This index is crucial for investors and financial analysts as it provides a clear view of the company’s distribution policy and its ability to generate returns for its stakeholders. A high IDR may indicate a mature company with stable cash flows, while a low IDR may suggest the retention of profits for future growth. In summary, the IDR is an essential tool for understanding a company’s financial strategy and economic health.

IFRIC, or the International Financial Reporting Interpretations Committee, is a body of the International Accounting Standards Board (IASB). Its main mission is to provide authorized interpretations of international accounting standards (IFRS) to ensure consistent and uniform application worldwide. IFRIC intervenes when complex or ambiguous issues arise in the implementation of IFRS, offering clarifications and guidelines to resolve these problems. The interpretations published by IFRIC are essential for multinational companies, auditors, and regulators, as they ensure increased transparency and comparability of financial statements. In summary, IFRIC plays a crucial role in maintaining the integrity and reliability of international financial reporting.

The IFRS (International Financial Reporting Standards) are international accounting standards developed by the International Accounting Standards Board (IASB). They aim to harmonize the presentation of financial statements globally, thereby facilitating the comparison and transparency of financial information between companies from different countries. The IFRS cover various aspects of accounting, such as revenue recognition, asset and liability valuation, and the presentation of financial statements. Adopted by many countries, including the European Union, these standards are essential for multinational companies and international investors, as they ensure increased consistency and reliability of financial data. The application of IFRS also helps reduce compliance costs for companies operating in multiple jurisdictions, while enhancing the confidence of investors and other stakeholders in the published financial information.

The IFRS Foundation (International Financial Reporting Standards Foundation) is a non-profit organization that develops and promotes international accounting standards, known as IFRS. These standards aim to harmonize the presentation of financial statements globally, thereby facilitating the comparability and transparency of financial information between companies from different countries. The foundation oversees the work of the International Accounting Standards Board (IASB), which is responsible for the creation and revision of IFRS standards. Adopted by more than 140 jurisdictions, IFRS are essential for investors, regulators, and companies, as they improve the quality and reliability of financial reporting, thereby reducing the risks of errors and fraud. The mission of the IFRS Foundation is to serve the public interest by fostering trust, economic growth, and global financial stability.

The IFRS Interpretation Committee is a body of the International Accounting Standards Board (IASB) responsible for providing guidance on the application of International Financial Reporting Standards (IFRS). This committee identifies IFRS interpretation issues that require clarification and issues official interpretations called IFRIC (International Financial Reporting Interpretations Committee). These interpretations aim to ensure a consistent and uniform application of IFRS standards globally, by resolving ambiguities and addressing stakeholders’ concerns. The work of the IFRS Interpretation Committee is essential to ensure the transparency, comparability, and reliability of international companies’ financial statements, thereby facilitating decision-making for investors, regulators, and other users of financial statements.

The IFRS S (International Financial Reporting Standards for Sustainability) is a set of international accounting standards focused on sustainability, developed by the International Sustainability Standards Board (ISSB). These standards aim to provide transparent, comparable, and consistent information on companies’ environmental, social, and governance (ESG) performance. The main objective of IFRS S is to help investors and other stakeholders assess the risks and opportunities related to sustainability, thereby facilitating more informed investment decisions. By integrating ESG criteria into financial reporting, IFRS S encourages companies to adopt more responsible and sustainable practices, while meeting the growing expectations of financial markets and society for environmental and social transparency and accountability.

Ijara is an Islamic financial term referring to a leasing or lease-to-own contract that complies with Sharia law. In this type of contract, a financial institution purchases an asset and leases it to a client for a specified period in exchange for periodic payments. Unlike traditional leasing contracts, Ijara adheres to the principles of Islamic finance, including the prohibition of interest (riba). At the end of the contract, the client may have the option to purchase the asset at its fair market value or at a predetermined price. Ijara is commonly used to finance real estate, equipment, or vehicles, and it offers an ethical alternative to conventional financial products for individuals and businesses wishing to adhere to Islamic principles.

Ijara-wa-Iqtina is an Islamic financial term referring to a lease-to-own contract. In this type of contract, a financial institution purchases an asset and leases it to a client for a specified period. During the contract period, the client makes periodic rental payments, which include a portion of the asset’s cost and a profit margin for the institution. At the end of the lease period, the client has the option to purchase the asset at a predetermined, often symbolic, price. This mechanism allows for the financing of assets while adhering to the principles of Islamic finance, which prohibit the payment or receipt of interest (riba). Ijara-wa-Iqtina is commonly used to finance real estate, industrial equipment, and vehicles, offering an ethical alternative to traditional loans.

ILAT, or Severance Pay for Seniority and Length of Service, is a financial compensation given to employees in the event of dismissal. This compensation is calculated based on the employee’s seniority within the company and their length of service. It aims to provide temporary financial security to dismissed employees, allowing them to meet their needs during the transition period to a new job. The amount of ILAT can vary according to national legislation, collective agreements, and the company’s internal policies. Generally, the higher the seniority and length of service, the more substantial the compensation will be. ILAT is a crucial element in human resources management and financial planning for companies, as it represents a legal obligation and a potential cost to anticipate in the event of restructuring or downsizing.

ILC, or Current Liquidity Indicator, is a crucial financial ratio used to assess a company’s ability to meet its short-term obligations. It is calculated by dividing current assets by current liabilities. An ILC greater than 1 indicates that the company has sufficient liquidity to cover its short-term debts, which is generally perceived as a sign of good financial health. Conversely, an ILC less than 1 may signal liquidity problems, suggesting that the company might struggle to pay its short-term creditors. Financial analysts and investors use this indicator to evaluate a company’s liquidity risk and financial stability. However, it is important to consider it in conjunction with other financial ratios to obtain a comprehensive view of the company’s financial situation.

Illiquidity refers to the difficulty or inability to quickly convert an asset into cash without significantly affecting its price. Unlike liquid assets such as stocks or bonds, illiquid assets often include real estate, works of art, or certain private equity holdings. Illiquidity can pose risks for investors, especially during financial crises, when the rapid sale of assets becomes crucial. Companies can also face illiquidity issues, compromising their ability to meet short-term obligations. To assess illiquidity, indicators such as transaction volume or the bid-ask spread are often examined. Prudent liquidity management is essential to minimize associated risks and ensure long-term financial stability.

The true and fair view is a fundamental principle in accounting and finance, aiming to ensure that a company’s financial statements accurately and honestly reflect its financial position, performance, and cash flows. This concept is essential for ensuring transparency and the trust of investors, creditors, and other stakeholders. It implies that financial information must be complete, neutral, and free from significant errors. The true and fair view is often associated with international accounting standards, such as IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles), which provide guidelines for the preparation and presentation of financial statements. By adhering to this principle, companies contribute to the stability and efficiency of financial markets, enabling informed decision-making based on reliable financial data.

An investment property is a real estate asset held by a company or an investor with the aim of generating rental income or achieving long-term capital appreciation. Unlike properties used for the company’s operational activities, investment properties are not intended to be occupied by the owner. They are often valued at their fair market value and can include offices, retail spaces, warehouses, or residential housing. Managing these assets requires a thorough analysis of real estate markets, occupancy rates, and economic trends to maximize returns. In accounting, investment properties are recorded on the balance sheet and may be subject to periodic revaluations to reflect their current value. They play a crucial role in diversifying investment portfolios and managing financial risks.

Fixed assets, also known as non-current assets, are durable goods acquired by a company to be used in its operational activities and not for resale. They are divided into three main categories: tangible fixed assets (land, buildings, machinery), intangible fixed assets (patents, trademarks, software), and financial fixed assets (investments, securities). These assets are essential for the production of goods and services and are recorded on the company’s balance sheet. Their cost is depreciated over their useful life, thus reflecting their gradual depreciation. Effective management of fixed assets is crucial for the company’s financial performance, as it directly impacts costs, profitability, and future investment capacity. Proper management of these assets allows for resource optimization and supports long-term growth.

Tangible fixed assets are physical assets held by a company for long-term use in its operations. They include items such as land, buildings, machinery, equipment, and vehicles. These assets are essential for the production of goods and services and are not intended to be sold as part of the company’s regular activities. Tangible fixed assets are recorded on the balance sheet at their acquisition cost, less accumulated depreciation, which represents the loss of value due to wear and tear and obsolescence. Effective management of these assets is crucial for the company’s operational and financial performance, as it directly impacts production costs and profitability. Investment decisions in tangible fixed assets require rigorous analysis to ensure an optimal return on investment.

Financial fixed assets represent long-term assets held by a company, generally for strategic or investment reasons. They include stakes in other companies, loans granted to subsidiaries, or equity securities such as stocks or bonds. Unlike tangible fixed assets (such as buildings or machinery) and intangible fixed assets (such as patents or trademarks), financial fixed assets are not intended to be used in the company’s regular operations. They are recorded on the balance sheet and can generate income in the form of dividends, interest, or capital gains. Effective management of these assets is crucial for the financial stability and long-term growth of the company.

Intangible assets represent non-physical assets held by a company that generate future economic benefits. Unlike tangible assets such as buildings or machinery, these assets are intangible. They include items such as patents, trademarks, copyrights, software, licenses, and goodwill. Their evaluation and accounting can be complex, as they often rely on estimates and judgments. Intangible assets are amortized over their useful life, unless this duration is indefinite, in which case they are subject to regular impairment tests. They play a crucial role in the valuation of companies, especially in the technology and creative sectors, where innovation and intellectual property are drivers of growth. Effective management of these assets can offer a significant competitive advantage.

The **impairment test** is an accounting process used to assess whether the carrying amount of an asset exceeds its recoverable amount, which is the amount that can be recovered through its use or sale. If the carrying amount is higher than the recoverable amount, an impairment loss is recorded, thereby reducing the asset’s value on the balance sheet and impacting the income statement with an impairment charge. This test is crucial to ensure that assets are not overvalued, providing a true and fair view of the company’s financial situation. It is often applied to long-term assets such as property, plant, and equipment, goodwill, and intangible assets. International accounting standards (IAS 36) and American standards (ASC 350) govern the procedures for the impairment test, ensuring consistency and transparency in financial statements.

The refinancing deadlock refers to a situation where a company or an individual is unable to refinance an existing debt due to unfavorable market conditions or deteriorations in their own financial situation. This can occur when interest rates rise, making the cost of refinancing prohibitive, or when the borrower’s creditworthiness is in doubt, limiting access to new credit. This situation can lead to cash flow difficulties, payment defaults, or even bankruptcy. Therefore, companies must prudently manage their debt maturities and maintain a good credit rating to avoid finding themselves in a refinancing deadlock. Debt management strategies, such as staggering maturities and diversifying funding sources, are essential to minimize this risk.

The principle of materiality, also known as the concept of materiality, is a fundamental concept in accounting and finance. It stipulates that only financial information likely to influence the economic decisions of users of financial statements should be taken into account. In other words, transactions or events deemed insignificant or immaterial can be omitted or simplified in financial reports. This principle allows efforts to be focused on elements that have a significant impact on the financial situation and performance of the company, thereby improving the clarity and relevance of the information provided. Materiality is subjective and can vary depending on the size of the company, its industry, and the expectations of the users of the financial statements. By applying this principle, companies can avoid overloading their reports with superfluous details while ensuring the transparency and reliability of essential information.

Deferred tax assets are an accounting concept that represents future tax savings resulting from temporary differences between the book value of assets and liabilities and their tax value. These differences can arise due to timing discrepancies in the recognition of income and expenses between accounting and tax standards. For example, a company may record an expense in its financial statements before it is tax-deductible. Deferred tax assets are recorded on the company’s balance sheet and reflect the expected tax reduction when these temporary differences reverse. They are essential for financial analysts and investors because they provide a more accurate view of future tax obligations and the overall financial situation of the company. Effective management of deferred taxes can also optimize cash flow and improve long-term profitability.

Deferred tax liability represents a future tax obligation resulting from timing differences between financial and tax accounting. These differences arise when income or expenses are recognized at different times in financial statements and tax returns. For example, a company may use different depreciation methods for its assets in its financial accounts and tax returns, thus creating a temporary difference. This difference generates a deferred tax liability, which is recorded on the company’s balance sheet. It reflects the income tax that the company will have to pay in the future when these timing differences reverse. Managing deferred taxes is crucial for effective tax planning and a true and fair presentation of financial statements, allowing investors and stakeholders to better understand the company’s actual financial situation.

The payable tax refers to the amount of tax that a business or an individual must pay to the tax authorities for a given period. It is calculated based on the declared income, profits, or other taxable elements. In accounting, the payable tax is recorded as a liability in the financial statements until it is actually paid. This term is crucial for financial management because it directly impacts cash flow and tax planning. Good management of the payable tax allows for the optimization of cash flows and the minimization of the risks of penalties for late payment. In summary, the payable tax represents a legal and immediate financial obligation to the State, requiring rigorous attention to ensure tax compliance and the financial health of the concerned entity.

The Corporate Income Tax (CIT) is a tax levied by the state on the profits made by businesses. It constitutes a significant portion of tax revenues and varies according to jurisdictions. In France, for example, the standard rate is 25% in 2022, but reduced rates may apply to small and medium-sized enterprises (SMEs) or certain specific sectors. The CIT is calculated on the taxable income, which is the accounting profit adjusted for tax reintegrations and deductions. Companies must declare and pay this tax annually, and quarterly installments may be required. Tax optimization, through tax credits, deductions, and exemptions, is commonly practiced to minimize the CIT. The latter plays a crucial role in the financial and strategic planning of companies, influencing their investment and financing decisions.

Corporate tax (IS) is a tax levied by the state on the profits made by companies. It constitutes an important source of revenue for governments and varies according to jurisdictions. The IS rate can be fixed or progressive, and it may include deductions and tax credits to encourage certain economic behaviors, such as investment in research and development. Companies must calculate their taxable profit by subtracting allowable expenses from their total income. IS is crucial for corporate tax planning, as it directly affects their net profitability. Effective management of IS can optimize the tax burden and improve the overall financial performance of the company. IS rates and rules are subject to legislative revisions, which requires constant monitoring to remain compliant and optimize tax strategies.

« In the money » (ITM) is a financial term used primarily in the context of options. An option is said to be « in the money » when its exercise would be profitable for the buyer. For a call option, this means that the price of the underlying asset is higher than the option’s strike price. For a put option, this means that the price of the underlying asset is lower than the strike price. For example, if a call option has a strike price of €50 and the underlying asset is trading at €60, the option is « in the money » by €10. Being « in the money » indicates a positive intrinsic value, which is a sign of potential profit for the investor. However, this does not guarantee a net profit, as the initial cost of the option and transaction fees must also be taken into account.

An incubator is a support structure dedicated to young innovative companies, often called startups. It provides an environment conducive to their development by offering various services such as premises, mentoring, management, finance, and marketing advice, as well as access to a network of partners and investors. The main objective of an incubator is to maximize the chances of success for startups by reducing risks and accelerating their growth. Incubators can be generalists or specialized in specific sectors like technology, health, or renewable energy. They play a crucial role in the entrepreneurial ecosystem by promoting innovation, job creation, and boosting the local and national economy.

The retirement severance pay is a sum of money paid by the employer to an employee upon their retirement. This severance aims to compensate for the loss of income related to the cessation of professional activity. The amount of the severance varies based on several criteria, such as the employee’s seniority, applicable collective agreements, and company agreements. In France, for example, the Labor Code provides for minimum legal amounts, but more favorable provisions can be negotiated. Fiscally, the retirement severance pay can benefit from exemptions under certain conditions, both for income tax and social security contributions. For the company, this severance represents an exceptional expense that must be accounted for and can impact the cash flow and financial results of the current fiscal year.

An Independent Business Review (IBR) is a thorough and objective assessment of a company’s financial, operational, and strategic situation, typically commissioned by creditors or investors. The main objective of the IBR is to provide an independent and impartial analysis of the company’s viability, identifying risks and opportunities. This review is often conducted by specialized consulting firms and includes an evaluation of cash flows, financial forecasts, debt structure, as well as operational and management aspects. The results of the IBR help stakeholders make informed decisions regarding financing, restructuring, or other strategic actions necessary to improve the company’s performance and stability. In times of financial difficulties, an IBR can be crucial for restoring the confidence of creditors and investors.

An « Index tracker » is a type of investment fund or ETF (Exchange-Traded Fund) designed to replicate the performance of a specific stock market index, such as the S&P 500 or the CAC 40. Instead of actively selecting stocks, an index tracker invests in the same securities and in the same proportions as the index it follows. This allows investors to benefit from diversification and the overall market performance with generally lower management fees than those of actively managed funds. Index trackers are popular for their simplicity, transparency, and cost efficiency, making them an attractive choice for investors seeking to achieve market-like returns while minimizing the risks and costs associated with active management.

A stock market index is an indicator that measures the performance of a specific group of stocks listed on a stock exchange. It is designed to reflect the economic health of a market, sector, or economy in general. Stock market indices are composed of several stocks selected according to specific criteria, such as market capitalization, liquidity, or sector representation. Among the most well-known indices are the Dow Jones Industrial Average (DJIA), the S&P 500, the NASDAQ Composite in the United States, and the CAC 40 in France. Investors and analysts use these indices to assess market trends, compare portfolio performances, and make investment decisions. Indices can also serve as the basis for derivative financial products such as index funds (ETFs) and futures contracts.

The profitability index (PI) is a financial indicator used to assess the profitability of an investment project. It is calculated by dividing the net present value (NPV) of the future cash flows generated by the project by the initial investment required. A PI greater than 1 indicates that the project is profitable, as it generates more value than the initial cost. Conversely, a PI less than 1 suggests that the project is not profitable. This index is particularly useful for comparing multiple investment projects and for making informed decisions regarding capital allocation. In summary, the profitability index helps companies maximize their profitability by selecting the most promising projects.

The profitability index (PI) is a financial indicator used to assess the attractiveness of an investment project. It is calculated by dividing the net present value (NPV) of the future cash flows generated by the project by the initial investment required. Formally, PI = NPV / Initial Investment. A PI greater than 1 indicates that the project is profitable, as it generates more value than the initial cost. Conversely, a PI less than 1 suggests that the project is not profitable. This index is particularly useful for comparing multiple investment projects, especially when resources are limited. In addition to other criteria such as the internal rate of return (IRR) and the payback period, the PI provides a clear perspective on the financial viability and efficiency of potential investments.

The Commercial Rent Index (ILC) is an economic indicator used in France to revise the rents of commercial leases. Created in 2008, the ILC is calculated quarterly by INSEE and consists of three elements: the consumer price index (CPI) for 50%, the construction cost index (CCI) for 25%, and the retail trade turnover index (RTTI) for 25%. This index allows for a more accurate reflection of the economic realities of merchants and landlords, taking into account the evolution of prices, construction costs, and commercial activity. The ILC is particularly important for businesses and real estate investors, as it provides an objective basis for adjusting rents according to current economic conditions, thereby contributing to better risk management and more precise financial planning.

The Tertiary Activities Rent Index (ILAT) is an economic indicator used in France to adjust the rents of commercial leases in the tertiary sector, which includes services, commerce, and financial activities. Created in 2011, the ILAT is calculated quarterly by INSEE (National Institute of Statistics and Economic Studies). It takes into account the evolution of consumer prices, construction costs, and office real estate prices. The ILAT allows for a more precise reflection of the economic variations specific to the tertiary sector, offering an alternative to the Construction Cost Index (ICC) and the Commercial Rent Index (ILC). Its use is particularly important for businesses and investors, as it allows for the securing of commercial leases by adjusting them to current economic conditions, while ensuring a certain financial stability for tenants and landlords.

The industrial sector refers to an economic sector that includes companies and activities related to the large-scale production of material goods. This sector encompasses various industries such as metallurgy, chemistry, automotive, aerospace, and many others. Industrial companies transform raw materials into finished or semi-finished products, often using mechanized and automated processes. They play a crucial role in the economy by generating jobs, stimulating technological innovation, and significantly contributing to the GDP. The performance of industrial companies is often closely monitored by investors and financial analysts, as they can be indicators of overall economic health. The challenges of the sector include managing production costs, optimizing supply chains, and adapting to increasingly strict environmental regulations.

The independence of accounting periods is a fundamental principle in accounting that stipulates each accounting period must be treated distinctly and independently from others. This means that revenues and expenses must be recorded in the period in which they are actually incurred, regardless of when payments are made or received. This principle allows for a faithful and accurate representation of the financial performance and the financial position of the company for each accounting period. By adhering to the independence of accounting periods, companies can avoid distortions in their financial statements, thereby facilitating more precise analysis and informed decision-making by investors, creditors, and other stakeholders. This principle is essential to ensure the transparency and comparability of financial information from one period to another.

Inertia, in corporate finance and economics, refers to the resistance to change in the processes, behaviors, or performances of an organization or market. It can manifest as a slowness in adopting new technologies, adjusting investment strategies, or reacting to economic fluctuations. This inertia can be due to internal factors, such as rigid organizational structures, conservative corporate cultures, or high change costs. It can also be influenced by external factors, such as strict regulations or stable market conditions. While inertia can offer a certain stability, it can also limit a company’s ability to innovate and quickly adapt to new opportunities or threats, thereby compromising its long-term competitiveness. Understanding and managing inertia is crucial to maintaining an agile and responsive organization.

Inflation is an economic term referring to the generalized and sustained increase in the prices of goods and services in an economy over a given period. It reduces consumers’ purchasing power, as each monetary unit allows for the purchase of fewer goods and services. Inflation is often measured by indices such as the Consumer Price Index (CPI). The causes of inflation can vary, including excess demand, an increase in production costs, or excessive monetary expansion. Central banks, such as the Federal Reserve or the European Central Bank, monitor and regulate inflation through monetary policies, adjusting interest rates to maintain economic stability. Moderate inflation is generally considered a sign of healthy economic growth, while excessive inflation or deflation can signal serious economic problems.

Inflation refers to the generalized and sustained increase in the prices of goods and services in an economy over a given period. It reduces consumers’ purchasing power and can influence companies’ investment decisions. Financial structure, on the other hand, refers to the composition of a company’s financing, including the proportion of debt and equity. A balanced financial structure is crucial for the company’s long-term stability and growth. Inflation can affect this structure by increasing financing costs and reducing the real value of debts. Companies must therefore adapt their financial strategy to manage the risks associated with inflation, notably by adjusting their prices, optimizing their cost management, and diversifying their sources of financing. A good understanding of the interaction between inflation and financial structure is essential for effective and sustainable management.

An « Info Memo » (Information Memorandum) is a key document used in financial transactions, particularly during mergers and acquisitions, fundraising, or business sales. It provides a detailed presentation of the target company, including its history, products or services, market position, financial performance, future projections, and growth strategies. The Info Memo is designed to inform and attract potential investors or buyers by offering them a comprehensive understanding of the company and its prospects. It also serves to assess the risks and opportunities associated with the investment or acquisition. In summary, the Info Memo is an essential tool for facilitating informed decision-making in complex financial transactions.

Financial markets are platforms where various financial instruments such as stocks, bonds, currencies, and commodities are traded. They play a crucial role in the economy by facilitating the mobilization of capital, risk management, and price determination. The main types of financial markets include stock markets, bond markets, foreign exchange markets (Forex), and derivatives markets. Investors, whether institutional or individual, use these markets to diversify their portfolios and optimize their returns. Regulators ensure the transparency and integrity of these markets to protect investors and maintain financial stability. Information on financial markets, such as stock indices, interest rates, and currency exchange rates, is essential for making informed investment decisions.

Stock market information refers to all data and news related to financial markets and listed securities. It includes elements such as stock prices, trading volumes, stock indices, companies’ financial results, as well as economic and political announcements that may influence the markets. Stock market information is essential for investors, financial analysts, and portfolio managers, as it allows them to make informed decisions regarding the purchase, sale, or holding of securities. Sources of stock market information include trading platforms, financial news agencies, analysts’ reports, and official company publications. Accurate and up-to-date stock market information is crucial to ensure the transparency and efficiency of financial markets.

Accounting information refers to all the financial and economic data collected, processed, and presented by a company to reflect its financial situation and performance. It includes financial statements such as the balance sheet, the income statement, and the cash flow statement. This information is essential for stakeholders, including investors, creditors, regulators, and management, to make informed decisions. Reliability, relevance, comparability, and understandability are fundamental qualities of accounting information. It is governed by accounting standards, such as IFRS (International Financial Reporting Standards) or GAAP (Generally Accepted Accounting Principles), which ensure a consistent and transparent presentation of financial data. In summary, accounting information is a crucial tool for financial analysis, strategic planning, and risk management.

Financial information refers to all data and reports related to a company’s financial situation, performance, and cash flows. It includes financial statements such as the balance sheet, income statement, and cash flow statement, as well as explanatory notes and management reports. This information is essential for investors, creditors, regulators, and other stakeholders, as it allows them to assess the company’s financial health, make investment decisions, and measure economic performance. The transparency and reliability of financial information are crucial for maintaining market confidence and ensuring the efficient allocation of resources. Accounting standards, such as IFRS or GAAP, play a key role in the standardization and comparability of this information on an international scale.

Financial engineering is a discipline that combines mathematical, statistical, and computational techniques to solve complex financial problems. It aims to design, develop, and implement innovative financial products, such as derivatives, options, and swaps, in order to manage risks, optimize returns, and meet the specific needs of investors and companies. Financial engineers use quantitative models to evaluate assets, forecast market trends, and develop hedging strategies. This expertise is crucial in areas such as portfolio management, financial product structuring, risk management, and corporate finance. By combining in-depth knowledge of finance, mathematics, and technology, financial engineering plays a key role in the evolution and efficiency of modern financial markets.

An Initial Bond Offering (IBO) is a method by which a company or a governmental entity issues bonds for the first time on the public market to raise funds. Unlike stocks, bonds are debt instruments that require the issuer to repay the principal with interest on specific dates. The IBO allows issuers to diversify their sources of financing and attract a wide range of investors, including institutions and individuals. The funds raised can be used for various needs, such as financing expansion projects, refinancing existing debts, or supporting ongoing operations. For investors, IBOs offer an opportunity to invest in fixed-income securities with potentially attractive returns while diversifying their portfolio. IBOs are regulated by financial authorities to ensure transparency and investor protection.

An Initial Coin Offering (ICO) is a fundraising method primarily used by startups in the blockchain technology and cryptocurrency sectors. During an ICO, a company issues digital tokens in exchange for capital, often in the form of cryptocurrencies like Bitcoin or Ethereum. These tokens can represent various rights, such as access to a future service or product, or even a share in the company’s profits. ICOs are comparable to Initial Public Offerings (IPOs), but they are less regulated, which can offer opportunities for high returns while also carrying significant risks. Therefore, investors must exercise due diligence before participating in an ICO. Financial regulators worldwide are closely monitoring this mode of financing due to the potential risks of fraud and market manipulation.

An Initial Coin Offering (ICO) is a fundraising method primarily used by startups in the blockchain technology and cryptocurrency sectors. During an ICO, a company issues digital tokens in exchange for capital, often in the form of cryptocurrencies like Bitcoin or Ethereum. These tokens can represent various rights, such as access to a future service or product, or even a share in the company’s profits. ICOs are comparable to Initial Public Offerings (IPOs), but they are less regulated, which can offer opportunities for high returns while also carrying significant risks. Therefore, investors must exercise due diligence before participating in an ICO. Financial regulators worldwide are closely monitoring this mode of financing due to the potential risks of fraud and market manipulation.

An Initial Public Offering (IPO), or stock market launch, is the process by which a private company offers its shares to the public for the first time. This operation allows the company to raise funds by selling parts of its capital on a stock exchange. The reasons for an IPO may include the need to finance growth, repay debts, or allow initial shareholders to realize gains. The IPO process generally involves several steps, including the selection of investment banks to underwrite the offer, the preparation of regulatory documents, and the setting of an issue price. An IPO can increase the company’s visibility and credibility, but it also imposes greater obligations in terms of transparency and governance. Investors must carefully evaluate the risks and opportunities associated with an IPO before participating.

Instant Payment, or instant payment, is a method of fund transfer that allows financial transactions to be carried out in real time, 24 hours a day, 7 days a week. Unlike traditional transfers that can take several business days, instant payments are processed in a few seconds. This speed is made possible by advanced payment infrastructures and secure communication protocols. Instant Payments are particularly advantageous for businesses and consumers, as they improve liquidity, reduce settlement times, and increase transaction transparency. In Europe, the SEPA Instant Credit Transfer (SCT Inst) is an example of an instant payment system. This financial innovation is transforming the payment landscape by offering a fast and efficient alternative to traditional payment methods.

The intangibility of the opening balance sheet is a fundamental accounting principle stipulating that the opening balance sheet of a fiscal year must exactly match the closing balance sheet of the previous fiscal year. This principle ensures the continuity and consistency of a company’s financial statements from one period to another. In other words, the assets, liabilities, and equity reported at the beginning of the fiscal year must be identical to those listed at the end of the previous fiscal year, without modification or adjustment. The intangibility of the opening balance sheet guarantees the reliability of financial information and facilitates the analysis of the company’s performance and financial situation over time. This principle is essential for auditors, investors, and other stakeholders who rely on accurate and consistent financial data to make informed decisions.

Integrated Reporting (IR) is a corporate reporting approach that combines financial and non-financial information to provide a holistic view of an organization’s performance and strategy. The objective is to give stakeholders a comprehensive understanding of how a company creates value in the short, medium, and long term. IR integrates elements such as governance, sustainability, environmental, social, and economic impacts, as well as risks and opportunities. This method goes beyond traditional financial reports by including non-financial performance indicators, enabling more informed decision-making and better communication with investors, employees, customers, and society at large. IR is supported by the International Integrated Reporting Council (IIRC) and aims to promote transparency and accountability in the business world.

Capital intensity refers to the level of capital required to produce a unit of good or service in a company. It is often measured by the ratio between fixed assets (such as machinery, buildings) and total production or sales. High capital intensity indicates that the company requires significant capital investments to operate, typical of industries like heavy manufacturing, energy, or telecommunications. Conversely, low capital intensity is characteristic of sectors like services or retail, where capital costs are less significant. Understanding capital intensity is crucial for investors and managers, as it influences the cost structure, profitability, and financing needs of the company. High capital intensity can also imply higher barriers to entry for new competitors.

Banking prohibition is a situation in which a person or a business is prohibited from issuing checks due to insufficient funds. This prohibition is imposed by the bank and reported to the Banque de France, which centralizes the information. The banking prohibition can last up to five years, unless the unpaid checks are regularized. During this period, the account holder can no longer issue checks and may have restricted access to certain banking services. This situation can also affect the credit rating of the individual or business, making it more difficult to obtain loans or credit. To lift the banking prohibition, it is necessary to regularize the unpaid checks and prove this regularization to the bank and the Banque de France.

Interest Cost, or the cost of interest, refers to the financial expenses that a company or an individual must pay to borrow funds. These costs are generally expressed as a percentage of the borrowed amount, known as the interest rate. The cost of interest can vary depending on several factors, such as the duration of the loan, the borrower’s credit risk, and general economic conditions. For companies, the cost of interest is a tax-deductible expense, which can influence financing decisions. Effective management of interest costs is crucial for maintaining financial health and profitability, as high borrowing costs can reduce net profits and limit investment capabilities. In summary, the cost of interest is a key element of financial management, directly impacting cash flow and economic performance.

The Interest Coverage Ratio (ICR) is a key financial indicator that measures a company’s ability to pay its interest on debt with its earnings before interest and taxes (EBIT). It is calculated by dividing EBIT by interest expenses. A high ICR indicates that the company generates enough revenue to cover its interest obligations, which is a sign of financial strength and low risk of default. Conversely, a low ICR may signal potential difficulties in meeting interest payments, which could concern creditors and investors. This indicator is particularly useful for assessing the financial health of highly indebted companies and is often used by financial analysts, lenders, and investors to make informed decisions.

An Interest Rate Swap (IRS) is a derivative financial contract in which two parties exchange interest payment flows, often to manage interest rate risks. Typically, one party pays a fixed interest rate while the other pays a variable rate, based on a reference index like LIBOR. Interest rate swaps are used by companies to stabilize their financing costs, by investors to speculate on interest rate movements, and by financial institutions to manage their exposure to rate fluctuations. These instruments allow for the transformation of variable-rate debt into fixed-rate debt, and vice versa, thus offering increased flexibility and risk management. IRSs are commonly used in portfolio management, financial planning, and hedging strategy.

An « Interim Facility Agreement » is a temporary financing contract used by companies to obtain short-term funds before finalizing long-term financing. This type of agreement is often used in situations where a company needs immediate liquidity for ongoing operations, acquisitions, or specific projects, but permanent financing is not yet in place. The agreement stipulates the loan conditions, including the amount, interest rate, duration, and required collateral. It serves as a transitional solution, allowing the company to maintain its financial stability and continue its activities without interruption. Once long-term financing is secured, the Interim Facility Agreement is generally repaid or replaced by more permanent loan conditions.

A financial intermediary is an entity or an individual that facilitates transactions between two parties in the financial markets. These intermediaries can include banks, brokers, financial advisors, investment funds, and wealth management companies. Their main role is to connect investors with investment opportunities by providing services such as portfolio management, investment advice, securities trading, and matching buyers and sellers. Financial intermediaries play a crucial role in the efficiency and liquidity of financial markets by reducing transaction costs and improving access to information. They also contribute to risk diversification and financial stability by facilitating the allocation of financial resources in the economy.

A crowdfunding intermediary is a platform or entity that facilitates the raising of funds for projects or businesses by connecting project initiators with individual investors. These intermediaries play a crucial role in the crowdfunding ecosystem, also known as crowdfunding. They offer services such as project verification, financial transaction management, and communication between stakeholders. Platforms can specialize in different types of crowdfunding, such as donations, loans (crowdlending), or equity investment (crowdequity). By acting as a bridge between entrepreneurs and investors, crowdfunding intermediaries democratize access to capital and enable innovative projects to come to life, while offering investors opportunities to diversify their portfolios.

Financial intermediation refers to the process by which financial institutions, such as banks, brokerage firms, and investment funds, facilitate the transfer of funds between savers and borrowers. These intermediaries collect deposits or investments from savers and redistribute them in the form of loans or investments to those who need them, such as businesses or individuals. This mechanism allows financial resources to be channeled into productive projects, thereby promoting economic growth. Furthermore, financial intermediation contributes to risk diversification, improved liquidity, and market efficiency by reducing transaction costs and providing valuable information on investment opportunities. Financial intermediaries thus play a crucial role in the proper functioning of modern economies.

A systematic internaliser (SI) is a financial entity, typically a bank or an investment firm, that executes client orders for financial instruments outside of regulated markets or multilateral trading facilities (MTFs). As an SI, the entity acts on its own account by providing liquidity and facilitating transactions directly with its clients, without going through a public exchange. This role is governed by the European directive MiFID II, which imposes pre- and post-trade transparency obligations to protect investors and ensure market integrity. SIs must publish firm prices for the financial instruments they handle and are required to adhere to strict rules regarding conflict of interest management and best execution. This mechanism helps improve the liquidity and efficiency of financial markets while offering alternatives to traditional trading platforms.

The International Accounting Standards (IAS) are a set of international accounting standards issued by the International Accounting Standards Committee (IASC) between 1973 and 2001. These standards aim to harmonize accounting practices globally, thereby facilitating the comparability and transparency of financial statements of companies operating in different countries. The IAS cover various aspects of accounting, such as revenue recognition, financial statement presentation, and the accounting for assets and liabilities. In 2001, the International Accounting Standards Board (IASB) took over from the IASC and began issuing the International Financial Reporting Standards (IFRS), which gradually complement and replace the IAS. The adoption of IAS/IFRS by many countries has contributed to greater consistency and reliability of financial information, thereby facilitating the decisions of investors, regulators, and other stakeholders.

The International Accounting Standards Board (IASB) is an independent body responsible for the development and publication of international accounting standards, known as International Financial Reporting Standards (IFRS). Founded in 2001 and based in London, the IASB aims to harmonize accounting practices globally, thereby facilitating the comparability and transparency of multinational companies’ financial statements. The IASB works closely with regulators, businesses, investors, and other stakeholders to develop standards that meet the needs of global financial markets. The IFRS are adopted by many countries, providing a common basis for the preparation of financial statements, which enhances investor confidence and the efficiency of capital markets.

The International Financial Reporting Standards (IFRS) are a set of international accounting standards developed by the International Accounting Standards Board (IASB). They aim to harmonize the presentation of financial statements on a global scale, thereby facilitating the comparability and transparency of financial information between companies from different countries. The IFRS cover various aspects of accounting, such as revenue recognition, asset and liability valuation, and the presentation of financial statements. Adopted by more than 140 countries, these standards are particularly important for multinational companies and international investors, as they allow for better assessment of financial performance and risks. The adoption of IFRS also helps to strengthen the confidence of financial markets and improve the efficiency of economic decisions.

The initial public offering, also known as an IPO, is the process by which a private company becomes public by offering its shares to the general public for the first time. This operation allows the company to raise funds to finance its growth, repay debts, or make acquisitions. The IPO involves several key steps, including the selection of investment banks to underwrite the offer, the determination of the issue price of the shares, and the preparation of regulatory documents. An IPO can increase the company’s visibility and credibility, but it also carries risks, such as ownership dilution and increased pressure for short-term financial performance. Investors must carefully evaluate the company’s prospects before participating in an IPO.

Tax consolidation is a tax mechanism that allows a parent company and its subsidiaries to consolidate their tax results for corporate tax purposes. This mechanism, often used by corporate groups, allows the profits and losses of the different entities within the group to be offset, thereby optimizing the overall tax burden. In France, this regime is governed by Articles 223 A and following of the General Tax Code. To benefit from it, the parent company must hold at least 95% of the capital of its subsidiaries. Tax consolidation offers several advantages, such as the neutralization of intra-group transactions and the possibility of carrying forward tax losses. However, it requires rigorous management and strict compliance with reporting obligations. This mechanism is particularly useful for groups seeking to maximize their tax efficiency while simplifying the management of their tax obligations.

Global integration is a business strategy aimed at standardizing and coordinating operations and processes on a global scale. This approach allows multinationals to benefit from economies of scale, better resource allocation, and increased consistency in managing their international activities. By centralizing strategic decisions and harmonizing business practices, companies can reduce costs, improve operational efficiency, and strengthen their competitive position in global markets. Global integration requires a robust technological infrastructure, effective communication, and a unified corporate culture to overcome challenges related to cultural, regulatory, and economic differences between countries. In summary, this strategy aims to maximize synergy between different operational units worldwide while maintaining sufficient flexibility to adapt to local specificities.

Proportional integration is a consolidation method used in accounting to integrate the financial statements of a company jointly owned with other entities. Unlike full consolidation, where a parent company fully consolidates the assets, liabilities, revenues, and expenses of its subsidiary, proportional integration only accounts for the proportional share of the joint venture. For example, if a company holds 50% of a joint venture, it will integrate 50% of the assets, liabilities, revenues, and expenses of that joint venture into its own financial statements. This method allows for a more accurate reflection of the economic reality of the company’s participation in the joint venture, thus providing a more precise picture of its financial situation and performance. Proportional integration is often used in sectors where partnerships and joint ventures are common, such as real estate, energy, and infrastructure.

Profit-sharing is an employee savings scheme in France aimed at associating employees with their company’s performance. It allows employees to receive a bonus proportional to the company’s results or performance, based on criteria defined in a profit-sharing agreement. This mechanism is optional and relies on negotiation between the employer and employee representatives. Profit-sharing bonuses benefit from tax and social advantages for both the company and the employees. They can be received immediately or placed in a Company Savings Plan (PEE) to benefit from income tax exemption. Profit-sharing aims to motivate employees, strengthen their commitment, and align their interests with those of the company, thereby fostering a culture of collective performance.

Compound interest is a financial concept where the interest earned on an investment or loan is reinvested to generate additional interest. Unlike simple interest, which is calculated only on the initial principal, compound interest takes into account the accumulated interest over time. This mechanism allows the investment to grow exponentially, as the interest itself generates interest. The formula for calculating compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P the initial principal, r the annual interest rate, n the number of times the interest is compounded per year, and t the duration in years. Compound interest is commonly used in savings accounts, long-term investments, and loans, and it plays a crucial role in financial planning and wealth management.

Accrued interest represents the interest accumulated on a loan or investment, but which has not yet been paid or received as of a given date. In accounting, they are recorded as expenses payable (for the borrower) or income receivable (for the lender) in the financial statements. This method allows for an accurate reflection of a company’s financial obligations and income, even if actual payments have not yet occurred. Accrued interest is essential for rigorous financial management, as it ensures that the financial statements provide a true picture of the company’s financial situation. They are often used in the context of accrual accounting, which aims to recognize income and expenses when they are incurred, rather than when they are paid.

« Non-controlling interests » (or « minority interests ») represent the share of profits and equity of a subsidiary that belongs to shareholders other than the parent company. In other words, when a parent company holds less than 100% of a subsidiary’s shares, external shareholders own a portion of that subsidiary. These interests are accounted for in the consolidated financial statements of the parent company to reflect the share of assets, liabilities, revenues, and expenses attributable to minority shareholders. They typically appear in the consolidated balance sheet under equity and in the consolidated income statement to indicate the share of profits or losses attributable to minority shareholders. Managing non-controlling interests is crucial for a fair representation of the financial position and economic performance of the entire group.

« Non-group interests » refer to the financial or economic interests held by parties outside a consolidated group of companies. In the context of financial statement consolidation, these interests represent the share of results and net assets attributable to minority shareholders, that is, those who are not part of the consolidating entity. For example, if a parent company holds 80% of the shares of a subsidiary, the remaining 20% is considered non-group interests. These interests are essential for a fair presentation of consolidated financial statements, as they allow for the distinction of the shares of profit and assets belonging to external shareholders. They generally appear in consolidated financial statements as « non-controlling interests » or « minority interests. » The management and communication of these interests are crucial for the transparency and accuracy of the financial information provided to investors and other stakeholders.

Interim interest is interest paid on borrowed funds during the construction or development period of a real estate or infrastructure project, before it is completed and generates revenue. This interest is calculated on the loan amount used to finance the ongoing work and is generally capitalized, meaning it is added to the principal amount of the loan. It helps cover financial costs during the construction phase, when the project does not yet produce cash flow. Interim interest is often included in the total cost of the project and can have tax implications, as it may be tax-deductible in certain jurisdictions. It plays a crucial role in cash flow management and financial planning for long-term projects.

Minority interests, also known as non-controlling interests, represent the share of minority shareholders in a consolidated subsidiary of a group. They appear in the consolidated financial statements when the parent company does not hold 100% of the subsidiary’s shares. These interests are recorded as liabilities on the consolidated balance sheet, reflecting the portion of the subsidiary’s net assets attributable to minority shareholders. In terms of results, the share of profits or losses attributable to minority interests is deducted from the consolidated net income to obtain the net income attributable to the parent company’s shareholders. Managing minority interests is crucial for financial transparency and strategic decision-making, as it influences the distribution of profits and the capital structure. Minority interests play a key role in mergers, acquisitions, and partnerships, affecting corporate governance and control.

Non-Controlling Interests (NCI), also known as non-controlling participations, represent the share of minority shareholders in a consolidated subsidiary of a group. These shareholders hold a portion of the subsidiary’s capital but do not exercise control over the company’s strategic decisions. In accounting, NCIs are presented in the group’s consolidated financial statements, separately from the interests of the majority shareholders. They appear on the balance sheet under equity and reflect the portion of the subsidiary’s net assets attributable to minority shareholders. NCIs are essential for accurate financial analysis, as they allow for the distinction of profits and risks attributable to majority and minority shareholders. Their proper treatment is crucial for the transparency and reliability of consolidated financial statements, thereby facilitating a better assessment of the group’s performance and financial health.

Notional interest is a tax mechanism that allows companies to deduct a fictitious interest on their equity, as if these funds had been borrowed. This system aims to reduce the tax discrimination between equity financing and debt financing, thereby encouraging companies to strengthen their capitalization. Introduced in Belgium in 2006, it allows for the calculation of a deduction based on a reference interest rate applied to adjusted equity. Notional interest can improve the solvency of companies and reduce their cost of capital, while offering a significant tax advantage. However, this mechanism has sparked debates about its effectiveness and fairness, with some criticizing its potential to favor large companies and reduce the state’s tax revenues.

« Post-account interests » refer to the interest accrued on a financial account after the close of the accounting period. This interest is calculated on the account balance at the end of the period and is generally added to the initial balance of the account for the following period. They can apply to various types of accounts, such as savings accounts, term deposit accounts, or loan accounts. Post-account interests are important for businesses and individuals because they influence the profitability of investments and the cost of borrowings. In accounting, they must be properly recorded to accurately reflect the financial situation of the entity. Effective management of these interests can optimize financial returns and minimize borrowing costs, thereby contributing to better overall financial health.

Precomputed interest is interest deducted in advance from the amount of a loan or a bond. Unlike postcomputed interest, which is paid periodically or at maturity, precomputed interest is subtracted from the initial principal at the outset. For example, for a loan of €10,000 with precomputed interest of €1,000, the borrower receives €9,000 but must repay €10,000. This method is often used for short-term loans and commercial paper. Precomputed interest can affect the actual cost of financing, as the borrower pays interest on an amount they did not actually receive. In accounting, it is recorded as an interest expense at the beginning of the loan period. This technique allows lenders to secure the interest upfront, thereby reducing the risk of non-payment.

The term « Invested Capital » refers to the total financial resources mobilized by a company to finance its operations and assets. It generally includes equity and long-term debt. Invested capital is a key measure for evaluating a company’s financial performance, as it allows for the calculation of indicators such as Return on Invested Capital (ROIC), which measures how efficiently a company uses its capital to generate profits. By analyzing invested capital, investors and managers can better understand the company’s financial structure, its ability to generate returns, and its long-term viability. Effective management of invested capital is crucial for maximizing shareholder value and ensuring sustainable growth.

Investing involves committing financial resources to assets or projects in the hope of generating a return or capital gain in the long term. Investments can take various forms, such as purchasing stocks, bonds, real estate, or mutual fund shares. The main objective is to grow the initial capital by taking advantage of economic growth, dividends, interest, or asset appreciation. Investing requires a thorough analysis of risks and opportunities, as well as an understanding of financial markets and economic trends. A well-thought-out investment strategy can help achieve personal or professional financial goals, such as retirement, buying a house, or funding business projects. However, it is crucial to diversify investments to minimize risks and maximize potential returns.

Investment refers to the allocation of financial resources into assets or projects with the aim of generating income or appreciating the value of capital over the long term. In corporate finance, it can involve acquiring tangible assets, such as machinery or buildings, or intangible assets, such as patents or software. In the stock market, investment involves the purchase of stocks, bonds, or other financial instruments. Investors assess the risks and potential returns before making decisions. In accounting, investments are often classified as long-term assets on the balance sheet. Effective investment management is crucial for economic growth and value creation for shareholders. Investment decisions are influenced by economic factors, such as interest rates, inflation, and economic growth prospects.

Responsible investment, also known as socially responsible investment (SRI), integrates environmental, social, and governance (ESG) criteria into investment decisions. It aims to generate financial returns while having a positive impact on society and the environment. Responsible investors evaluate not only the financial performance of companies but also their ethical behavior, natural resource management, labor practices, and corporate governance. This approach promotes sustainable and ethical practices, encouraging companies to adopt responsible behaviors. SRI can manifest through various strategies, such as the exclusion of certain controversial sectors, shareholder engagement, or thematic investment. By combining financial performance and positive impact, responsible investment is attracting more and more investors concerned about the future of the planet and society.

Socially Responsible Investment (SRI) is an investment strategy that integrates environmental, social, and governance (ESG) criteria into the portfolio selection and management process. The objective of SRI is to generate financial returns while having a positive impact on society and the environment. SRI investors favor companies that adopt sustainable, ethical, and transparent practices, and avoid those involved in controversial activities such as fossil fuels, tobacco, or weapons. SRI can take several forms, such as sector exclusion, shareholder engagement, or thematic investment. Increasingly popular, SRI meets the growing demand from investors for investments aligned with their personal values and contributes to the promotion of more sustainable and equitable economic development.

An investor is a person or entity that allocates capital in the hope of generating a return on investment (ROI). Investors can be individuals, such as private persons, or institutions, such as pension funds, insurance companies, and sovereign wealth funds. They invest in various assets, including stocks, bonds, real estate, commodities, and private businesses. Investment strategies vary based on the financial goals, risk profile, and time horizon of the investor. Some seek short-term gains through active trading, while others prefer long-term investments for capital growth or passive income generation. Investors play a crucial role in the economy by providing the necessary capital for innovation, business growth, and infrastructure development.

A financial investor is a person or entity that allocates capital into various financial instruments with the aim of generating a return. These instruments can include stocks, bonds, mutual funds, real estate, and other financial assets. Financial investors can be individuals, institutions such as pension funds, insurance companies, or sovereign wealth funds. They analyze markets, assess risks and opportunities, and make investment decisions based on financial and economic criteria. Their main objective is to maximize return on investment while effectively managing risk. Financial investors play a crucial role in the functioning of financial markets by providing capital to businesses and contributing to market liquidity and stability.

An institutional investor is a financial entity that invests large amounts of funds on behalf of its clients or members. These entities include pension funds, insurance companies, mutual funds, sovereign funds, and banks. Due to their ability to mobilize significant sums, institutional investors play a crucial role in financial markets, influencing asset prices and market liquidity. They often benefit from reduced transaction fees and privileged access to certain investment opportunities. Their expertise and resources allow them to conduct thorough analyses and diversify their portfolios, thereby minimizing risks. In summary, institutional investors are major players in the economy, contributing to the stability and efficiency of financial markets.

A qualified investor is a person or entity that meets certain strict financial criteria defined by regulators, such as the SEC in the United States. These criteria generally include a high annual income, substantial net worth, or significant professional experience in the field of investments. Qualified investors have access to exclusive investment opportunities, such as venture capital funds, hedge funds, and private securities offerings, which are not available to the general public. This classification aims to protect less experienced investors from the high risks associated with these types of investments. In France, the equivalent is often called a « sophisticated investor » or « professional investor, » and the criteria may vary. Qualified investors play a crucial role in financing innovative companies and high-risk projects, thereby contributing to economic dynamism.

An American qualified investor is a person or entity that meets strict financial criteria defined by the United States Securities and Exchange Commission (SEC). These criteria generally include an annual income exceeding USD 200,000 (or USD 300,000 jointly with a spouse) or a net worth exceeding USD 1 million, excluding the primary residence. Qualified investors have access to investment opportunities not available to the general public, such as venture capital funds, private equity funds, and private securities offerings. This classification aims to protect less experienced investors from the high risks associated with these types of investments, while allowing qualified investors to diversify their portfolios and potentially achieve higher returns. Companies and funds often seek qualified investors to raise capital more quickly and with fewer regulatory constraints.

An investment bank is a financial institution specialized in a range of financial services primarily intended for companies, governments, and institutional investors. It plays a crucial role in capital-raising operations, whether through the issuance of shares (IPO) or bonds. Investment banks also offer advisory services in mergers and acquisitions (M&A), restructurings, and other strategic transactions. They facilitate securities trading, asset management, and provide in-depth financial analyses. Additionally, they actively participate in financial markets by acting as intermediaries between securities issuers and investors. Investment banks are essential for the proper functioning of financial markets and contribute to the liquidity and efficiency of the global financial system.

Investment Banking, or investment banking, is a sector of finance that focuses on creating capital for other companies, governments, and other entities. Investment banks offer a range of services, including underwriting new securities issues, facilitating mergers and acquisitions (M&A), asset management, and financial advisory. They play a crucial role in financial markets by helping companies raise funds through the issuance of stocks or bonds and providing strategic advice for complex transactions. Major investment banks include institutions like Goldman Sachs, JPMorgan Chase, and Morgan Stanley. The sector is known for its demanding work environment but also for its high compensation opportunities. Investment banking professionals must possess strong analytical skills, an in-depth knowledge of financial markets, and the ability to manage complex transactions.

Investment grade is a term used to designate bonds or other debt instruments that are rated as high quality by credit rating agencies. These ratings, such as those provided by Standard & Poor’s, Moody’s, and Fitch, indicate that the issuer of the debt has a strong capacity to meet its financial obligations. Securities classified as investment grade are generally considered less risky and offer lower yields compared to lower-quality bonds, called « junk bonds. » Institutional investors, such as pension funds and insurance companies, often favor investment grade securities due to their more conservative risk profile. Investment grade ratings start at BBB- with Standard & Poor’s and Fitch, and at Baa3 with Moody’s. These securities play a crucial role in investment portfolios by offering a combination of security and stable returns.

An IPO, or Initial Public Offering, is the process by which a private company issues shares to the public for the first time and becomes a publicly traded company. This operation allows the company to raise funds by selling portions of its capital to institutional and individual investors. The funds obtained can be used to finance growth, repay debts, or make other strategic investments. An IPO is often seen as a major milestone in a company’s life, as it increases its visibility, credibility, and ability to attract talent. However, it also involves increased obligations in terms of financial transparency and governance. The IPO process is complex and requires the involvement of investment banks, lawyers, and other advisors to ensure compliance with regulations and maximize the success of the operation.

In finance, the term « irreducible » often refers to a situation or element that cannot be simplified or reduced further. For example, in the context of shares, an « irreducible share » may refer to a share that cannot be divided into smaller units. This term is also used in public tender offers (PTOs) or capital increases, where existing shareholders may have an irreducible right to subscribe to new shares proportionally to their current holdings, without the possibility of splitting. This ensures that existing shareholders maintain their percentage of ownership in the company, thereby protecting their rights and interests. In summary, « irreducible » in finance emphasizes the idea of a unit or right that remains whole and indivisible, ensuring the stability and protection of stakeholders’ interests.

The IRS, or Internal Revenue Service, is the federal agency of the United States responsible for tax collection and the enforcement of tax laws. Created in 1862, the IRS plays a crucial role in financing government operations by collecting income, corporate, estate, and gift taxes. The agency is also responsible for administering tax credits and refund programs. In addition to tax collection, the IRS conducts audits to ensure tax compliance and combats tax fraud. The IRS also provides educational resources and assistance services to taxpayers to help them understand and fulfill their tax obligations. In summary, the IRS is an essential pillar of the American tax system, ensuring that the funds necessary for the functioning of the government are collected efficiently and fairly.

Socially Responsible Investment (SRI) refers to an investment approach that integrates environmental, social, and governance (ESG) criteria into the analysis and selection of financial assets. The objective of SRI is to generate a positive impact on society while achieving competitive financial returns. SRI investors evaluate companies not only on their financial performance but also on their ethical behavior, management of natural resources, relationships with employees and communities, and corporate governance. This approach supports sustainable and responsible practices while reducing risks associated with ESG factors. SRI is gaining popularity among institutional and individual investors, reflecting a growing awareness of the importance of sustainability and social responsibility in the business world.

Istisna’a is an Islamic financial contract primarily used for the financing of construction and manufacturing projects. In accordance with the principles of Islamic finance, this contract allows one party (the client) to commission the manufacturing or construction of a specific good from another party (the manufacturer or builder) for an agreed price. Payment can be made in several installments, according to the progress of the work, or in a single payment upon delivery. Unlike other Islamic contracts, Istisna’a allows for a certain degree of flexibility in terms of deadlines and specifications, making it particularly suitable for complex and large-scale projects. This type of contract is often used by Islamic financial institutions to finance infrastructure, real estate, or industrial equipment, while adhering to Sharia principles, which prohibit interest (riba) and excessive speculation.

ITMOI, or « Interest Times Multiple of Interest, » is a financial indicator used to assess a company’s ability to cover its interest expenses with its earnings before interest and taxes (EBIT). It is calculated by dividing EBIT by interest expenses. A high ITMOI indicates that the company generates enough revenue to cover its interest obligations, which is a sign of financial strength and low risk of default. Conversely, a low ITMOI may signal potential difficulties in meeting interest payments, which could concern creditors and investors. This indicator is particularly useful for financial analysts and investors when evaluating a company’s financial health, especially in capital-intensive sectors where debts are common.