Financial Glossary

Comprehensive definitions of key financial terms and concepts

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Assets

Balance Sheet

Resources owned by a company that have economic value and can provide future benefits.

Liabilities

Balance Sheet

Debts or obligations that a company owes to creditors, suppliers, or other parties.

Equity

Balance Sheet

The ownership interest in a company, representing the residual claim on assets after liabilities.

Revenue

Income Statement

The total income generated by a company from its primary business operations.

EBITDA

Income Statement

Earnings Before Interest, Taxes, Depreciation, and Amortization - a measure of operating performance.

Cash Flow

Cash Flow Statement

The net movement of cash in and out of a business during a specific period.

Working Capital

Financial Ratios

Current assets minus current liabilities, indicating short-term financial health.

ROE

Financial Ratios

Return on Equity - measures how effectively a company uses shareholders' equity to generate profit.

ROA

Financial Ratios

Return on Assets - indicates how efficiently a company uses its assets to generate earnings.

Current Ratio

Financial Ratios

Current assets divided by current liabilities, measuring liquidity and short-term debt coverage.

Debt-to-Equity

Financial Ratios

Total debt divided by total equity, indicating the company's financial leverage.

P/E Ratio

Valuation

Price-to-Earnings ratio - compares company's stock price to its earnings per share.

Market Cap

Valuation

Market Capitalization - the total value of a company's outstanding shares.

NPV

Investment Analysis

Net Present Value - the difference between present value of cash inflows and outflows.

IRR

Investment Analysis

Internal Rate of Return - the discount rate that makes NPV equal to zero.

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