Qatar Economic Outlook Issue Number 13

Qatar Economic Outlook 2021 - 2023
 
122 
What is the trailing price-to-earnings ratio? 
This is calculated by taking the current stock 
price and dividing it by a company’s trailing 
earnings per share for the past 12 months. 
This measure differs from the forward price-
to-earnings ratio, which uses earnings 
estimates for the next four quarters. 
What is the price-to-book ratio? 
This ratio compares a stock’s market value to 
its book value, calculated by dividing the 
current closing price of the stock by the latest 
quarter’s book value per share.
What is the LIBOR rate? 
While LIBOR is going to be eliminated by 
the end of December 2021, it is useful to 
learn that
LIBOR stands for the London 
Inter-Bank Offered Rate. It is the interest rate 
that banks in London use to borrow between 
themselves. It was approved in 1986 as a 
reference rate for lending to each other.
The daily rate of LIBOR is determined for 
international currencies, whether those that 
are loaned or borrowed by a group of major 
banks in the London Money Market, chosen 
by the British Bankers Association. Each 
bank in the group displays the interest rate 
that it pays for the loans it borrows, as well as 
the interest rate that it can pay to borrow from 
other banks.
This price is calculated for fifteen types of 
borrowing and for periods from one day to 12 
months, meaning that there are 150 LIBOR 
interest rates for the ten major currencies 
under this system, including dollars, yen, 
euros, pounds sterling, and the rest of the 
basket of currencies. However, the British 
LIBOR is the largest worldwide, due to the 
sheer size of the money market in London's 
financial district. 
LIBOR interest rate rise when risks rise and 
liquidity decreases and vice versa; it has 
reached importance as it has become a 
standard for all global markets. 
Balance of payment concepts 
What is the trade balance? 
This is the difference between a nation’s 
imports and exports of merchandise 
measured over a specified period (normally a 
calendar year). The trade balance is part of 
the wider current account balance. 
What is the free-on-board (f.o.b.) price? 
The f.o.b. price of exports and imports of 
goods is the market value of the goods at the 
point of uniform valuation (the customs 
frontier of the economy from which they are 
exported). It is equal to the cost, insurance, 
freight (c.i.f.) price less the costs of transport 
and insurance charges, between the customs 
frontier of the exporting (importing) country 
and that of the importing (exporting) country. 
What is the cost, insurance, and freight (c.i.f.) 
price? 
The c.i.f. price is the price of a good delivered 
at the frontier of the importing country, 
including any insurance and freight charges 
incurred to that point, or the price of a service 
delivered to a resident, before the payment of 
any import duties or other taxes on imports or 
trade and transport margins within the 
country. 
What is the income and services balance? 
This is the sum of net income received from 
non-residents and the balance in services 
trade, measured over a specified period. The 
income account comprises flows derived 
from labor (wages paid to non-resident 
employees) and from net investment income. 
The services balance consists mainly of 
payments 
for 
travel, 
transport, 

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