Financial Glossary


Q

Qualified Small Business Stock. Stock of qualifying domestic C corporations as defined under Section 1202 of the Internal Revenue Code. To qualify, a corporation's gross assets cannot exceed $50 million (on a tax basis), and at least 80 percent of the company's assets by value must be used in the active conduct of one or more qualified trades or businesses. Section 1202 does not apply to S corporations, limited liability companies, or limited partnerships. Qualified small business stock held for at least five years qualifies for a reduced long-term capital gains rate on sale and is also the beneficiary of certain preferential rollover treatment after a holding period of six months.

Qualifying Initial Public Offering. An Initial Public Offering that exceeds certain minimum standards. These standards are contractual set to protect preferred stockholders from having to convert from preferred stock to common stock in connection with an IPO that is too small creates an insufficient public float or has no meaningful public market or liquidity for the investor. The standards frequently include one or more of the following: (i) a minimum aggregate dollar amount (gross or net); (ii) a specified stock price (e.g., greater than $5); (iii) a high-quality underwriter (e.g., national underwriters); or (iv) an agreed trading market or exchange (NASDAQ, New York Stock Exchange, or American Stock Exchange).

Quarterly Report (10 Q). A report that all public companies must file quarterly with the SEC.

Quick Ratio. A measure of a company's ability to meet its financial obligations with its more liquid assets. To determine the quick ratio, you divide the company's cash, accounts receivable and marketable securities by its current liabilities. In general, a healthy company should have a quick ratio of at least 1 to 1.