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Business and Marketing > Financial Vocabulary > Flashcards

Financial Vocabulary Flashcards

1
Q

AMORTIZATION

A

The practice of spreading an intangible asset’s cost over that asset’s useful life.

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2
Q

EBITDA

A

Earnings before interest, taxes, depreciation, and amortization, is a measure of a company’s overall financial performance and is used as an alternative to net income in some circumstances.

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3
Q

AMORTIZATION

A

The practice of spreading an intangible asset’s cost over that asset’s useful life.

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4
Q

ASSETS

A

An item of value owned by a company.

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5
Q

CURRENT ASSETS

A

All the assets of a company that are expected to be sold or used as a result of standard business operations over the next year.

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6
Q

FIXED ASSETS

A

Tangible assets that a business expects to own for more than a year.

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7
Q

ASSET ALLOCATION

A

Involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash.

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8
Q

BONDS

A

A fixed-income investment that represents a loan made by an investor to a borrower, usually corporate or governmental.

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9
Q

STOCKS

A

A security that represents the ownership of a fraction of a corporation.

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10
Q

BALANCE SHEET

A

A financial statement that reports a company’s assets, liabilities, and shareholder equity.

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11
Q

BALANCE SHEET EQUATION

A

An accounting equation that seeks to ensure the sum of a company’s or business assets is equal to the sum of liabilities and capital invested.

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12
Q

CAPITAL GAIN

A

An increase in a capital asset’s value and is considered to be realized when the asset is sold.

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13
Q

CAPITAL MARKET

A

Where savings and investments are channeled between suppliers—people or institutions with capital to lend or invest—and those in need.

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14
Q

COMPANIES

A

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

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15
Q

INSTITUTIONAL INVESTOR

A

A company or organization that invests money on behalf of clients or members.

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16
Q

MUTUAL FUNDS

A

A company that brings together money from many people and invests it in stocks, bonds or other assets.

17
Q

HEDGE FUNDS

A

An investment vehicle that caters to high-net-worth individuals, institutional investors, and other accredited investors.

18
Q

CASH FLOW

A

To the net balance of cash moving into and out of a business at a specific point in time.

19
Q

OPERATING CASH FLOW

A

The net cash generated from a company’s normal business operations.

20
Q

INVESTING CASH FLOW

A

The net cash generated from a company’s investment-related activities, such as investments in securities, the purchase of physical assets like equipment or property, or the sale of assets.

21
Q

FINANCING CASH FLOW

A

Shows the net flows of cash that are used to fund the company and its capital.

22
Q

CASH FLOW STATEMENT

A

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources.

23
Q

COMPOUND INTEREST

A

The interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

24
Q

EQUITY

A

Represents the value that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debts were paid off.

25
Q

INCOME STATEMENT

A

A financial statement that shows you the company’s income and expenditures.

26
Q

LIABILITIES

A

The legal debts a company owes to third-party creditors.

27
Q

CURRENT LIABILITIES

A

A company’s short-term financial obligations that are due within one year or within a normal operating cycle.

28
Q

LONG-TERM LIABILITIES

A

Debts a company owes third-party creditors that are payable beyond 12 months.

29
Q

LIQUIDITY

A

A company’s ability to raise cash when it needs it.

30
Q

NET WORTH

A

The value of the assets a person or corporation owns, minus the liabilities they owe.

31
Q

PROFIT MARGIN

A

Gauges the degree to which a company or a business activity makes money, essentially by dividing income by revenues.

32
Q

GROSS PROFIT MARGIN

A

Shows the percentage of sales revenue a company keeps after it covers all direct costs associated with running the business.

33
Q

NET PROFIT MARGIN

A

Measures how much net income or profit is generated as a percentage of revenue.

34
Q

RETURN ON INVESTMENT (ROI)

A

A metric used to understand the profitability of an investment.

35
Q

VALUATION

A

Is the process of determining the current worth of a business, using objective measures, and evaluating all aspects of the business.

36
Q

WORKING CAPITAL

A

Is the money used to cover all of a company’s short-term expenses, including inventory, payments on short-term debt, and day-to-day expenses.

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