Stock market terms starting with R

Reserves and Surplus Financial Statements & Accounting ₹ crore The accumulated profits retained in the business plus other reserves such as securities premium and revaluation reserve. Reserves and Surplus = Retained Earnings + Securities Premium + Other Reserves

Resistance Technical Analysis & Chart Patterns ₹ A price level at which selling has previously been sufficient to halt an advance. Test: price has reversed downward from approximately this level on at least two prior occasions

Retained Earnings Financial Statements & Accounting ₹ crore Cumulative profits a company has kept rather than distributed as dividends, carried forward within reserves. Closing Retained Earnings = Opening Retained Earnings + Net Profit - Dividends Paid

Retest Technical Analysis & Chart Patterns qualitative A return of price to a level it has recently broken through, to see whether that level now holds from the other side. Test: price returns to within a small band of the broken level after the initial breach

Return on Assets Fundamental Analysis & Valuation % Net profit as a percentage of total assets, measuring how much profit the asset base generates regardless of funding. ROA = Net Profit / Average Total Assets x 100

Return on Capital Employed Fundamental Analysis & Valuation % Operating profit as a percentage of the total capital, both equity and debt, used to generate it. ROCE = Operating Profit (EBIT) / (Shareholders' Equity + Total Debt) x 100

Return on Equity Fundamental Analysis & Valuation % Net profit expressed as a percentage of shareholders' equity, measuring what the business earns on the owners' capital. ROE = Net Profit Attributable to Shareholders / Average Shareholders' Equity x 100

Return on Invested Capital Fundamental Analysis & Valuation % After-tax operating profit as a percentage of the capital actually invested in operations, excluding surplus cash. ROIC = Net Operating Profit After Tax / (Total Debt + Equity - Cash) x 100

Revenue Financial Statements & Accounting ₹ crore The income a company earns from its principal business activities during a period, before any costs are deducted. Revenue = Units Sold x Average Selling Price, summed across products and services

Revenue Deficit Economy, Macro & Market Cycles % The excess of the government's revenue expenditure over its revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Receipts

Revenue Growth Fundamental Analysis & Valuation % The rate at which a company's sales increase from one period to the next. Revenue Growth = (Current Period Revenue - Prior Period Revenue) / Prior Period Revenue x 100

Revenue Recognition Financial Statements & Accounting qualitative The accounting rules determining when and how much revenue a company may record from a contract with a customer. Test: recognise revenue when control of the goods or services transfers to the customer, in the amount expected to be received

Reverse Repo Rate Economy, Macro & Market Cycles % The rate at which the Reserve Bank borrows from commercial banks, absorbing surplus liquidity from the system. Test: it is the rate the central bank pays banks for parking surplus funds with it

Reverse Stock Split Corporate Actions, Dividends & Governance shares A consolidation of several shares into one, raising the face value and the price proportionally. New Share Count = Old Count / Consolidation Ratio; Adjusted Price = Old Price x Consolidation Ratio

Rho Derivatives, Futures & Options ₹ The change in an option's price for a one-percentage-point change in the risk-free interest rate. Rho = Change in Option Price / Change in Risk-Free Rate (per 1 percentage point)

Rights Issue Corporate Actions, Dividends & Governance ₹ An offer of new shares to existing shareholders in proportion to their holdings, usually at a discount to the market price. Theoretical Ex-Rights Price = (Existing Shares x Cum-Rights Price + New Shares x Issue Price) / Total Shares After Issue

Rising Wedge Technical Analysis & Chart Patterns qualitative A formation in which both boundaries slope upward but converge, with the lower boundary rising more steeply than the upper. Test: higher highs and higher lows, with the line through the lows rising faster than the line through the highs

Risk Risk & Portfolio Management qualitative The possibility that an investment's actual outcome differs from what was expected, including permanent loss of capital. Test: the range of possible outcomes is wide, and at least some of those outcomes are materially worse than the expected one

Risk Aversion Market Psychology & Behavioural Finance qualitative The preference for a certain outcome over an uncertain one with the same expected value. Test: the certainty equivalent accepted is less than the gamble's expected value

Risk Capacity Risk & Portfolio Management % How much loss an investor can absorb financially without their plans failing. Test: the loss that could be sustained while still meeting known obligations from other resources and income

Risk Management Risk & Portfolio Management qualitative The practice of identifying, measuring and limiting the losses a portfolio can suffer. Test: a maximum acceptable loss is defined in advance, and position sizes are set so that it cannot be exceeded in normal conditions

Risk of Ruin Risk & Portfolio Management % The probability that a series of losses reduces capital below the level needed to continue. Rises with the fraction of capital risked per position, with the loss rate, and falls with the ratio of average win to average loss

Risk Tolerance Risk & Portfolio Management % How much volatility and loss an investor is emotionally willing to endure without abandoning their plan. Test: the largest decline the investor would hold through without selling, judged by past behaviour rather than by stated intention

Risk-Free Rate Risk & Portfolio Management % The return available on an investment considered to carry no default risk, used as the baseline for all other returns. Test: the instrument is a sovereign obligation in the domestic currency, with maturity matching the horizon being analysed

Terms starting with R