Financial Glossary
Comprehensive definitions of key financial terms and concepts
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Assets
Balance SheetResources owned by a company that have economic value and can provide future benefits.
Liabilities
Balance SheetDebts or obligations that a company owes to creditors, suppliers, or other parties.
Equity
Balance SheetThe ownership interest in a company, representing the residual claim on assets after liabilities.
Revenue
Income StatementThe total income generated by a company from its primary business operations.
EBITDA
Income StatementEarnings Before Interest, Taxes, Depreciation, and Amortization - a measure of operating performance.
Cash Flow
Cash Flow StatementThe net movement of cash in and out of a business during a specific period.
Working Capital
Financial RatiosCurrent assets minus current liabilities, indicating short-term financial health.
ROE
Financial RatiosReturn on Equity - measures how effectively a company uses shareholders' equity to generate profit.
ROA
Financial RatiosReturn on Assets - indicates how efficiently a company uses its assets to generate earnings.
Current Ratio
Financial RatiosCurrent assets divided by current liabilities, measuring liquidity and short-term debt coverage.
Debt-to-Equity
Financial RatiosTotal debt divided by total equity, indicating the company's financial leverage.
P/E Ratio
ValuationPrice-to-Earnings ratio - compares company's stock price to its earnings per share.
Market Cap
ValuationMarket Capitalization - the total value of a company's outstanding shares.
NPV
Investment AnalysisNet Present Value - the difference between present value of cash inflows and outflows.
IRR
Investment AnalysisInternal Rate of Return - the discount rate that makes NPV equal to zero.
