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Common and Preferred Stocks

Stock (also known as the share) is a term, used to represent owners’ interest and potential claim on assets and income of a company. In order to raise capital for fulfilling financing requirements of companies, common and preferred stocks are issued to the general public in a stock exchange; both stocks have different rights, benefits, […]

Ordinary Shares: Definition, Features & Example

Understand Ordinary shares (also known as common shares) are used to represent ownership of shareholders in a company. For example, if you have purchased 20 shares out of 100 shares of ABC Company, this means that you own 20% stocks of the company or you own the company 20%. Why invest in ordinary shares? By […]

Murabaha: Definition, Types & Example

Understand Murabaha is a kind of sale where an Islamic financial institution buys an asset on demand of a customer and resells it to the customer at a cost plus profit basis while allowing the customer to pay in installments. Types of the Murabaha In an ordinary Murabaha sale, two parties; a seller and a […]

Interest Coverage Ratio

Understand Interest coverage ratio is used to measure a company’s ability to pay off interest payments on debt (from its income before interest and taxes). In other words, the ratio explains that is the company able to pay off interest expense on debt. The formula to calculate the interest coverage ratio is: = EBIT / […]

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