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Glossary of Financial Terms - C
 
This glossary is not limited to Islamic terms and
contains Arabic and English terms that are also referred to
in the study of Islamic economics, banking and insurance.

 
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Capital Broadly, all the money and other property of a corporation or other enterprise used in transacting its business. 
Capitalisation Long-term debt, preferred stock and net worth. The loan capital of a community development loan fund; includes that which has been borrowed from and is repayable to third parties as well as that which is earned or owned by the loan fund (i.e. "permanent capital"). 

Capital Markets

A financial market where debt or equity securities are traded by institutions and individuals; the market for trading long-term debt instruments (those that mature in more than one year). Also used in a more general context to refer to the market for stocks, bonds, derivatives and other investments. A capital market is made up of three major parts: (1) stock market, (2) bond market, and (3) money market. It also works as an exchange for trading existing claims on capital in the form of shares. T he generic term for markets used to raise longer term funds from various investors.

As opposed to money markets where short-term securities are traded, capital markets are more specifically understood as the markets for medium- to long-term financial products such as shares and bonds.

Capital market instruments include fixed-income instruments such as index-linked bonds, asset backed securities, mortgage backed securities and related products.

Capital market instruments include fixed-income instruments such as index-linked bonds, asset backed securities, mortgage backed securities and related products.

Cash Flow Financing Short-term loan providing additional cash to cover cash shortfalls in anticipation of revenue, such as the payment(s) of receivables.
Collateral   Assets pledged to secure the repayment of a loan .
Commodity Murabaha See Murabaha, commodity
Commutative Relating to, involving, or characterised by substitution, interchange, or exchange. Legal term in which one in which each of the contracting parties gives and, receives an equivalent. The contract of sale is of this kind. The seller gives the thing sold, and receives the price, which is the equivalent. The buyer gives the price and receives the thing sold, which is the equivalent.
Cost-plus  Financing See Murabaha.
Covenant An agreement or promise to do or not to do a particular thing; to enter into a formal agreement; a promise incidental to a deed or contract. The following are functional objectives guiding most covenants: full disclosure of information, preservation of net worth, maintenance of asset quality, maintenance of adequate cash flow, control of growth, control of management, assurance of legal existence and concept of going concern, provision for lender profit or program goals.
Current Asset Assets that will normally be turned into cash within a year   .
Current Liability Liability that will normally be repaid within a year

Current Ratio
Current assets divided by current liabilities -- a measure of liquidity. Generally, the higher the ratio, the greater the "cushion" between current obligations and a firm's ability to meet them.
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