A liabilities, and shareholder 22.
Capital: Financial assets,
equity at a specific point in such as cash, investments, or
1. Absolute Change: The time. property, that a business
difference between two uses to operate.
values. 12. Bank Guarantee: A
guarantee issued by a bank 23. Capital Market: A market
2. Accounting: The process to ensure the fulfillment of a where long-term securities,
of recording, summarizing, contractual obligation. such as stocks and bonds, are
and analyzing financial traded.
transactions. 13. Bankruptcy: A legal
process where a person or 24. Capital Structure: The
3. Acquisitions: The company is unable to pay mix of debt and equity
purchase of one company by their debts. financing used by a company.
another.
14. Bill of Exchange: A 25. Cash: Money in the form
4. Amortization: The gradual written order instructing one of currency or demand
reduction of a loan balance party to pay a fixed sum of deposits.
through regular payments. money to another party.
26. Cash Conversion Cycle:
5. Annual Report: A 15. Bond: A fixed-income The time it takes for a
document that publicly investment in which an company to convert its
traded companies issue investor loans money to an investments in inventory and
annually to provide entity (typically a corporation other working capital
information about their or government) that borrows components into cash flows.
financial performance, the funds for a defined
operations, and future period of time at a fixed 27. Cash Flow: The net
prospects. interest rate. amount of cash and cash
equivalents being transferred
6. Anti-Money Laundering 16. Book Value: The value of into and out of a business.
(AML): Laws and regulations an asset as recorded on a
designed to prevent money company's balance sheet. 28. Certificate of Deposit
laundering and terrorist (CD): A time deposit offered
financing. 17. Break-Even Analysis: A by a bank that pays a fixed
technique used to determine interest rate.
7. Asset: A resource with the point at which total
economic value that an revenue equals total cost. 29. CFO: Chief Financial
individual, corporation, or Officer, a high-level executive
country owns or controls 18. Broker: An individual or responsible for managing a
with the expectation that it firm that acts as an company's finances.
will provide future benefit. intermediary between
buyers and sellers of 30. Chart of Accounts: A list
8. Asset Allocation: The securities. of all the accounts used by a
process of distributing company to record financial
investments across various 19. Budget: A financial plan transactions.
asset classes. for a defined period, often
one year.
9. Audit: An examination of
financial records to ensure 20. Business Environment:
accuracy and compliance The external factors that
with accounting standards. influence a business's
operations, such as
10. Auditor's Report: A economic, social, political,
formal opinion issued by an and technological factors. 31. Checking Accounts: Bank
auditor about the accuracy accounts that allow
and fairness of a company's customers to withdraw
financial statements. money by writing checks.
C
32. Collateral: Assets
21. Callable Bond: A bond pledged as security for a
B that can be redeemed by the loan.
issuer before its maturity
11. Balance Sheet: A date. 33. Collateral Trust Bond: A
financial statement that bond secured by collateral,
reports a company's assets, such as stocks or bonds.
34. Commercial Papers: 46. Default Risk: The risk 59. Financial Conduct
Short-term unsecured that a borrower will fail to Authority (FCA): A UK
promissory notes issued by meet their debt obligations. regulatory agency
corporations. responsible for overseeing
47. Depreciation: The the conduct of financial
35. Common Stock: A type of allocation of the cost of a services firms.
equity security that tangible asset over its useful
represents ownership in a life. 60. Financial Institution: A
corporation. company that provides
48. Derivative: A financial financial services, such as
36. Contractual Obligations: instrument whose value is banks, insurance companies,
Legal agreements that derived from an underlying and investment firms.
require a company to fulfill asset.
certain obligations. 61. Financial Instrument: A
49. Dividend: A payment contract that gives a financial
37. Convertible Bond: A made by a corporation to its right to one party and a
bond that can be converted shareholders. financial obligation to
into a specific number of another party.
shares of common stock. E
62. Financial Management:
38. Corporation: A legal 50. Economic Value Added The efficient allocation of
entity that is separate from (EVA): A measure of a resources to achieve
its owners. company's financial organizational goals.
performance that calculates
39. Credit: The ability to the excess return generated 63. Financial Modeling: The
obtain goods or services by an investment. use of mathematical models
before payment. to analyze financial data.
51. Embezzlement: The theft
40. Credit Analysis: The of funds or assets by an 64. Financial Planning: The
process of evaluating a employee. process of creating a plan for
borrower's creditworthiness. achieving financial goals.
52. Equity: The value of a
41. Credit Rating: A measure shareholder's ownership in a 65. Financial Reporting: The
of a borrower's corporation. process of communicating
creditworthiness, assigned financial information to
by a credit rating agency. 53. Equity Financing: Raising stakeholders.
capital by issuing shares of
42. Currency Exchange: The stock. 66. Financial Security: The
process of converting one ability to meet financial
currency into another. 54. Exchange Rate: The rate obligations and achieve
at which one currency can be financial goals.
exchanged for another.
67. Financial Statement: A
formal record of the financial
activities of a business.
D 55. Executive Compensation:
The salary, bonuses, and 68. Fiscal Policy:
other benefits paid to a Government policy that
43. Debit: A reduction in an affects the economy through
asset account or an increase company's executives.
taxation and spending.
in a liability or equity
account. 56. Expenditure: The act of
spending money. 69. Fiscal Year: A one-year
period used for accounting
44. Debenture Bond: An and budgeting purposes.
unsecured bond backed only 57. Expenses: Costs incurred
by the issuer's in the process of generating
revenue. 70. Forecast: A prediction of
creditworthiness. future events.
45. Default: Failure to meet a F
71. Forecasting: The process
financial obligation, such as a of making predictions about
loan payment. 58. Financial Analysis: The
process of analyzing a future events.
business's financial
performance. 72. Fraud: Intentional
deception for personal gain.
G 85. Know Your Customer 97. Long-Term Debt: Debt
(KYC): A regulatory that is due more than one
73. Going Concern: The requirement for businesses year from the balance sheet
assumption that a business to verify the identity of their date.
will continue to operate clients. This helps prevent
indefinitely. fraud, money laundering, M
and other illegal activities.
74. Goodwill: An intangible 98. Macro Environment: The
asset that represents the L broad external factors that
excess of the purchase price influence a business, such as
of a business over the fair 86. Lease: A contractual economic, social, political,
market value of its agreement where one party and technological factors.
identifiable assets and (the lessor) grants another
liabilities. party (the lessee) the right to 99. Margin: The difference
use an asset for a specific between the cost of a good
H period in exchange for or service and its selling
periodic payments. price.
75. Hedge: A strategy used
to reduce risk. 87. Ledger: A book or
computerized file used to
76. Hedge Fund: A pooled record financial transactions. 100. Market Analysis: The
investment fund that uses a process of studying a market
variety of investment to understand its size,
strategies. growth potential, and
88. Lenders: Individuals or customer needs.
77. Horizontal Analysis: A institutions that provide
financial analysis technique loans. 101. Market Capitalization:
that compares financial data The total market value of a
over time. 89. Lending: The practice of company's outstanding
providing money or other shares.
78. Hybrid Security: A assets to borrowers with the
financial instrument with expectation of repayment, 102. Market Maker: A
characteristics of both debt often with interest. financial firm that creates a
and equity. market for a particular
90. Letter of Credit: A security by quoting both a
I document issued by a bank buy and sell price.
guaranteeing payment to a
79. Income Statement: A seller on behalf of a buyer. 103. Market Risk: The risk
financial statement that that the value of an
reports a company's 91. Leverage: The use of investment will decline due
revenues, expenses, and net borrowed money to increase to fluctuations in market
income over a specific the potential return of an prices.
period. investment.
104. Maturity: The date on
80. Income Tax: A tax levied 92. Liability: A debt or which a debt or investment
on income. financial obligation. becomes due.
81. Index: A statistical 93. Liquidity: The ability to 105. Maturity Date: The date
measure of the change in a quickly convert assets into on which a debt or
group of securities over time. cash. investment matures.
82. Index Fund: A mutual 94. Liquidity Ratio: A 106. Merger: The
fund that tracks a specific financial ratio that measures combination of two or more
market index. a company's ability to meet companies.
short-term obligations.
83. Industry Analysis: The 107. Microfinance: Providing
process of analyzing the 95. Liquidity Risk: The risk financial services to low-
competitive landscape of an that an asset cannot be income individuals and small
industry. easily converted into cash. businesses.
84. Inflation: A general 96. Loan: A sum of money 108. Microfinance
increase in prices over time. lent to someone, typically at Institution: A financial
interest, with the institution that provides
K expectation of repayment. microfinance services.
109. Money Laundering: The 123. Operating Lease: A 136. Preferred Stock: A type
process of concealing the lease that does not transfer of equity security that has
illegal origin of money. ownership of the asset to the priority over common stock
lessee. in terms of dividend
110. Money Market: A payments and claims on
market for short-term debt 124. Opportunity Cost: The assets in the event of
instruments. cost of forgoing the next best liquidation.
alternative.
111. Mortgage: A loan 137. Primary Market: The
secured by real estate. market where securities are
issued for the first time.
112. Mutual Fund: A 125. Option: A financial
professionally managed contract that gives the 138. Private Equity:
investment fund that pools holder the right, but not the Investment in private
money from many investors obligation, to buy or sell an companies.
to purchase securities. asset at a specific price on or
before a specific date. 139. Private Placement: The
N sale of securities to a limited
126. Option Contract: See number of investors.
113. Net Asset Value (NAV): Option.
The value of a mutual fund's 140. Property, Plant, and
assets minus its liabilities, 127. Option Market: A Equipment (PPPE): Tangible
divided by the number of market where options are assets used in a business,
shares outstanding. traded. such as land, buildings, and
machinery.
114. Net Income: A 128. Option Pricing: The
company's total earnings or process of determining the 141. Proprietary Trading:
profit. fair value of an option. Trading securities with a
firm's own capital for its own
115. Net Sales: Total revenue P account.
minus returns and
allowances. 129. Partnership: A business 142. Proxy Statement: A
organization owned by two document that solicits
116. Nominal Interest Rate: or more people. shareholder votes for a
The stated interest rate on a specific corporate action.
loan or investment. 130. Pension Fund: A fund
established to provide 143. Public Offering: The sale
117. Non-Current Asset: An retirement benefits to of securities to the general
asset that is not expected to employees. public.
be converted into cash
within one year. 131. Performance Metrics: 144. Public-Private
Measures used to evaluate Partnership: A partnership
118. Non-Current Liability: A the performance of a between a government
liability that is not due within business, investment, or entity and a private
one year. individual. company.
120. Note: A written promise 132. Portfolio: A collection of R
to pay a debt. investments.
145. Ratio Analysis: The
121. Notes: Short-term 133. Portfolio Management: process of analyzing a
unsecured debt instruments. The process of selecting and company's financial
managing investments to performance by calculating
O achieve specific investment ratios.
goals.
121. Off-Balance-Sheet 146. Regulatory Compliance:
Financing: A financing 134. Portfolio Risk: The risk Adherence to government
technique that allows a associated with investing in a regulations.
company to avoid showing portfolio of assets.
debt on its balance sheet. 147. Regulatory Risk: The
135. Preferred Dividend: A risk that changes in
122. Operating Expenses: fixed dividend paid to regulations will negatively
The ongoing costs a business holders of preferred stock. impact a business.
incurs to operate, such as
rent, utilities, and salaries.
148. Remittances: Money
sent from one country to
another.
149. Repurchase Agreement:
A short-term borrowing
transaction where securities
are sold with an agreement
to repurchase them at a
higher price.
150. Return on Equity (ROE):
A measure of a company's
profitability that calculates
the return generated on
shareholder equity.
151. Return on Investment
(ROI): A performance
measure used to evaluate
the efficiency of an
investment.
152. Revenue: Income
generated from business
activities.
153. Risk Assessment: The
process of identifying and
evaluating potential risks.
154. Risk Management: The
process of identifying,
assessing, and mitigating
risks.
155. Risk Mitigation: The
process of reducing the
impact of risks.
