Glossary of Investment Terms

Federal Funds—a market among commercial banks in which banks that need a short-term loan in order to meet regulatory reserve requirements are able to borrow from banks with excess funds. The Federal Funds rate is the interest rate charged on such loans.

Federal Reserve Board—the governing body of the Federal Reserve System, which regulates certain banks and is charged with setting national monetary policy.

FHLB Advances (Thrift Industry)—funds borrowed from the regional Federal Home Loan Bank.

Financial Strength Rating—a relative measure of financial strength of the companies reviewed by Value Line. The relative ratings range from A++ (strongest) down to C (weakest), in nine steps.

Financial Times-Stock Exchange 100 (FT-SE 100)—a stock price index made up of 100 of the largest stocks traded on the London Stock Exchange. The index is published by The Financial Times, a London-based financial newspaper.

Finding Cost (Natural Gas [Diversified] and Petroleum Industries)—the amount of money spent per barrel to increase proved reserves through acquisitions, discovery, or enhanced recovery.

Fixed Charge Coverage (Electric Utility Industries)—pretax operating income after depreciation but before other income, interest charges, and Allowance for Funds Used During Construction (AFUDC), divided by long-term plus short-term interest plus twice the preferred dividend. Used as a measure of financial strength for an electric utility. A fixed charge coverage of 100 means that the operating income equals fixed expenses. A figure above 100 means that operating income exceeds fixed expenses, and vice versa.

Free Cash Flow—net income plus depreciation minus the total of dividends, capital expenditures, required debt repayments, and any other scheduled cash outlays.

Full Cost Accounting (Canadian Energy, Natural Gas Diversified, and Petroleum Industries)—a method of accounting under which all costs related to the exploration and development of oil and gas reserves are immediately expensed (a less conservative method than Successful Efforts Accounting).

Fully Diluted Earnings Per Share—earnings per share assuming conversion of all convertible securities plus the exercise of all warrants and options. Similar to Diluted Earnings, which replaced Fully Diluted EPS for all years after December 15, 1997.

Funds Borrowed (Bank Industries)—Federal Funds (free reserves borrowed from other banks), securities sold under Repurchase Agreements ("repos"), commercial paper sold by bank holding companies and non bank subsidiaries, and any other non deposit sources of short-term funds.