Equal to the nominal or face value of a security. A bond selling at par is worth an amount equivalent to its original issue value or its value upon redemption at maturity-typically $1000/bond. See: Discount, premium.

Par bond

A bond trading at its face value.

Par value

Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date.

Par value of currency

The official exchange rate between two countries’ currencies.

Parallel loan

A process whereby two companies in different countries borrow each other’s currency for a specific period of time, and repay the other’s currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans.

Payback Period (PP)

The length of time required to recover the cost of an investment.


(1) A bond sold above its par value. (2) The price of an option contract; also, in futures trading, the amount by which the futures price exceeds the price of the spot commodity. For convertibles, amount by which the price of a convertible exceeds parity, and is usually expressed as a percentage. If a stock is trading at $45, and the bond convertible at $50 is trading at 105, the premium is $15, or 16.66% (15/90). If the premium is high, the bond trades like any fixed income bond; if low, like a stock. See: Gross parity, net parity. For futures, excess of fair value of future over the spot index, which in theory will equal the Treasury bill yield for the period to expiration minus the expected dividend yield until the future’s expiration. For options, price of an option in the open market (sometimes refers to the portion of the price that exceeds parity). For straight equity, price higher than that of the last sale or inside market. Related: Inverted market premium payback period. Also called break-even time; the time it takes to recover the premium per share of a convertible security.

Premium market

Premium market is one in which the market leader has more than 41.7% of the Market and at least 1.7 times the share of the second company.


Privatization is the partial or total sale of government business to the private sector.


A combination of activities designed to fulfil a major element of performance management, e.g. Strategic or Financial planning.


Profit is the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses).

Profit and Loss Account

A company’s profit and loss account shows revenue, expenditure and the profit and/or loss resulting from operations for a given ‘financial year’.

Profit Center

Profit Center is a section of an organization that is responsible for producing profit, e.g., a division of a corporation that is not a stand-alone entity but is required to produce profits within the corporation.

Profit Margin On Sales

Profit Margin On Sales is: a. Gross Profit Margin on Sales = Gross Profit/Sales * 100; or, b. Net Profit Margin on Sales = Net Profit After Tax/Sales * 100.

Profit volume chart

A graph that gives us the same break even results but it contains only the profit line, showing the amount of profit expected to be made over a range of levels of output


A measure of business success through comparing profit made with the amount sold or invested.

Profitability index

The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.