The systematic recording, reporting, and analysis of financial transactions of a business. Read More >>

This term refers to the amounts a company owes to its suppliers or vendors for goods or services it has received but not yet paid for. The AP is essentially a form of credit from vendors, allowing a company to buy now and pay later, and it’s recorded as a current liability on a company's balance sheet. Read More >>

In contrast to AP, AR represents money owed to a company by its customers for goods or services delivered or used but not yet paid for. Essentially, it's money that is owed to the company, typically from their customers, and it’s recognized as a current asset on a company's balance sheet. Read more >>

This is the process of gradually reducing a debt through scheduled, pre-determined installments of principal and interest over a set period of time. It can also refer to the gradual write-down of the cost of an intangible asset over its useful life. Read more >>

Assets are resources owned by a company that have economic value and can be used to meet its financial obligations or generate income. They are categorized as either current (short-term, liquid assets) or non-current (long-term) and they include items such as cash, inventory, property, and equipment. Read more >>

This is a legal status for a person or corporation unable to repay their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. It can provide a fresh start for individuals or corporations, but also involves the liquidation of assets to repay creditors. Read more >>

This is a financial statement that displays a company's financial position at a specific point in time, showing assets, liabilities, and shareholders' equity. Assets = Liabilities + Shareholders' Equity is the equation that represents the balance sheet, illustrating that the resources of a company (assets) are funded by either creditors (liabilities) or by owners (shareholders' equity). Read more >>

This is a field of finance that proposes psychology-based theories to explain stock market anomalies, such as severe rises or falls in stock price. The purpose is to identify and understand why people make certain financial choices. Within behavioral finance, it is assumed that the information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes. Read more >>

In finance, Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole. It is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns. A Beta greater than 1 indicates that the investment's price will be more volatile than the market, while a Beta less than 1 means it will be less volatile. Read more >>

A board of directors is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors. Some private and nonprofit organizations also have a board of directors. Read more >>

Fixed income instruments representing loans made by an investor to a borrower (typically corporate or governmental). Read More >>

The value of an asset as it appears on a company's balance sheet, equal to cost minus accumulated depreciation.

Book Value is a fundamental financial concept in both accounting and corporate finance. It represents the total value of a company if it were to be liquidated and all liabilities settled, based on the value recorded in the company's books. Essentially, book value is calculated by subtracting total liabilities from total assets of a company. Read more >>

Wealth in the form of money or other assets owned by a person or organization or available for purposes such as starting a company or investing. Read more >>

This is a measure of a bank's capital, expressed as a percentage of a bank's risk-weighted credit exposures. It is used to protect depositors and promote the stability and efficiency of financial systems around the world. Read more >>

CAPM is a financial model that determines the expected return on an investment given its risk. It shows the relationship between expected return and systematic risk for a security. Read more >>

This is a process used by companies to evaluate and rank potential expenditures or investments that are significant in amount. It involves the decision making process which determines whether an organization's long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. Read more >>

This refers to the funds a business uses to acquire, upgrade, and maintain its physical assets such as property, buildings, an industrial plant, technology, or equipment. Read more >>

The increase in value of a capital asset (like investments or real estate) that gives it a higher worth than the purchase price.

Capital gains refer to the rise in value of an investment or real estate property that gives it a higher worth than the purchase price. The gain, which is not realized until the asset is sold, is the difference between the purchase price (the basis) and the selling price. Capital gains are categorized as short-term or long-term and must be claimed on income taxes.

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It refers to the way a corporation finances its assets through a combination of debt, equity, or hybrid securities. The firm's capital structure is the composition or 'structure' of its liabilities. Read more >>

This is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Read more >>

Investment securities that are short-term, have high credit quality and are highly liquid.

Cash equivalents refer to highly liquid investments that can be readily converted into cash. These short-term commitments are typically characterized by their low risk and high liquidity. Examples of cash equivalents include Treasury bills, commercial paper, money market funds, and short-term government bonds with a maturity date of three months or less from the date of purchase. They provide companies with a safe place to store excess cash while earning a small return. In accounting and corporate finance, these assets are important as they are included in the company's balance sheet under current assets and play a fundamental role in managing liquidity risk and maintaining operational flexibility.

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The total amount of money being transferred into and out of a business, especially affecting liquidity.

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This is the process of estimating the future financial position of a business. It is an essential tool for managing liquidity, supporting business planning, budgeting, and decision-making activities. Read more >>

This financial document shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Read more >>

A business process that involves collection and management of cash, as well as the use of such cash for short-term investment opportunities. Read more >>

A senior executive with responsibility for the financial actions of a company. The CFO's duties include tracking cash flow and financial planning as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions. Read more >>

An index that measures the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. Read more >>

The system of rules, practices, and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community. Read more >>

A direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Read more >>

The direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good. Read more >>

Companies that assign credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. Read more >>

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account.

In accounting, a credit refers to an entry that is made on the right side of an account ledger to record the decrease in an asset or expense, or the increase in liability, equity, or revenue. The use of credits is integral to the double-entry bookkeeping system, where each financial transaction affects at least two accounts and is recorded as both a debit and a credit.

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The possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Credit Risk is a fundamental concept in both accounting and corporate finance. It refers to the risk that a borrower may not repay a loan and that the lender may lose the principal of the loan or the interest associated with it. It's a significant aspect of business operations and financial management as it directly impacts the sustainability and profitability of an enterprise.

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A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

The Current Ratio is another vital metric used widely in corporate finance and accounting to assess a company's short-term liquidity or its ability to pay off its current liabilities with its current assets. It is calculated by dividing the company's current assets by its current liabilities.

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

Compound interest refers to the process by which interest earned on an investment or loan is added back to the principal amount, and then that interest also earns interest in the subsequent periods. It is a powerful concept in finance due to the exponential growth it offers over time. The more often the interest is compounded within a certain period, the greater the overall return or amount due.

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An accounting entry that either increases an asset or expense account, or decreases a liability or equity account.

In accounting, a debit refers to an entry made on the left side of an account ledger that records an increase in an asset or an expense, or a decrease in liability, equity, or revenue. The use of debits is intrinsic to the double-entry bookkeeping system in which every financial transaction affects at least two accounts and is recorded as both a debit and a credit.

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An amount of money borrowed by one party from another, often for making large purchases.

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This is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. A high debt-to-equity ratio generally means that a company has been aggressive in financing its growth with debt, which can result in volatile earnings. Read more >>

A tax liability or asset that results from temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year.

Deferred tax refers to a tax liability or asset that results from temporary differences between the way financial assets and liabilities are recognized in financial statements and how they're treated for tax purposes. These differences typically arise due to the different treatment of revenue and expenses when preparing the financial reports and the tax return. Understanding the concept of deferred tax is crucial in corporate finance and accounting as it can have a significant impact on a company's fiscal strategy and financial performance.

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The gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.

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The allocated portion of the cost of a company's fixed assets that is considered used up in a given period.

Depreciation expense is an accounting term that refers to the allocation of the cost of tangible assets over their useful lives. Businesses use depreciation to account for the wear and tear of assets, such as machinery, vehicles, and buildings, over time. It is essentially an estimate of how much of an asset's value has been used up. Depreciation expense is a key component in accounting as it helps companies align their income statement with their balance sheet, ensuring that income is matched with the expenses that helped generate that income, a principle known as the 'matching principle' in accounting.

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These are financial contracts that derive their value from an underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates, and market indexes. Read more >>

This is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders in the form of dividends. Some companies have a "high dividend policy" where they return money to investors regularly, while others may choose to reinvest profits into business growth. Read more >>

This is a financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the dollar value of dividends paid in a given year per share of stock held by the dollar value of one share of stock. Read more >>

These are payments made by a corporation to its shareholders, usually in the form of cash or additional shares. They're essentially a portion of the company's earnings that gets distributed back to its owners (the shareholders). Read more >>

This is a valuation method used to estimate the value of an investment based on its expected future cash flows. Under the DCF method, these future cash flows are estimated and then discounted to calculate their present value, which is then used to assess the potential for investment. Read more >>

This is a risk management strategy that involves spreading investments around to reduce exposure to any one particular asset or risk. A diversified portfolio contains a mix of different asset types and investment vehicles in an attempt to limit potential losses. Read more >>

This is a framework used to analyze a company's return on equity (ROE). The DuPont analysis breaks down ROE into three components: profit margin, total asset turnover, and financial leverage, each of which provides a different perspective on the company's performance. Read more >>

These are key statistics that indicate the direction of an economy. They are used to analyze economic performance and predict future trends, including GDP, unemployment rates, and inflation rates. Read more >>

This is the portion of a company's profit allocated to each outstanding share of common stock. It serves as an indicator of a company's profitability. Read more >>

The value of an ownership interest in property, including shareholders' equity in a business. Read more >>

This involves the management and disposal of that person's estate during the person's life and at their death. It involves planning for tax efficiency and the transfer of assets to beneficiaries. Read more >>

This is the value of one country's currency in relation to another currency. Exchange rates fluctuate based on economic factors like inflation, industrial production, and geopolitical events. Read more >>

The cost incurred in an organization's effort to generate revenue. Read more >>

It involves the use of borrowed funds in the expectation of realizing a greater rate of return than the cost of interest. High financial leverage indicates high levels of debt. Read more >>

These are arenas in which people trade financial securities, commodities, and other fungible items at prices that reflect supply and demand. Read more >>

This is the process of creating a summary of a company's expenses and earnings in the form of a spreadsheet that can be used to calculate the impact of a future event or decision. Read more >>

This is the task of determining how a business will afford to achieve its strategic goals and objectives. Read more >>

These are mathematical comparisons of financial statement accounts or categories. These relationships between the financial statement accounts help investors, creditors, and internal company management understand how well a business is performing and areas of needed improvement. Read more >>

A financial statement is a formal record of a company's financial activities. It's like the dashboard of your car, providing key indicators about the company's speed (growth), fuel efficiency (profitability), and overall condition (financial health). Read more >>

This is a private agreement between two parties to buy a particular asset at an agreed future price. Read more >>

This is the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet. Read more >>

This is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Read more >>

This is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period. Read more >>

This is the difference between revenue and cost of goods sold (COGS), divided by revenue. It's expressed as a percentage and represents the portion of each dollar of revenue that the company retains as gross profit.

Gross margin, also known as gross profit margin, is a key profitability metric for a business. It represents the proportion of each dollar of a company's revenue that it retains as gross profit, after accounting for the direct costs associated with producing the goods and services sold.

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This is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company's income statement. Read more >>

Business costs, such as rent, that are constant whatever the quantity of goods or services produced.

Fixed costs are business expenses that do not change with the level of production or sales. These are costs that a company must pay, regardless of its operational activity. They are often contractual or time-related, such as rent or salaries paid to employees.

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These are alternative investments that use pooled funds and employ different strategies to earn an active return for their investors. Hedge funds are typically open to a limited range of investors who pay a performance fee to the fund’s investment manager. Read more >>

An income statement, sometimes referred to as a profit and loss statement, is one of the most important financial statements for any business or investor who wants to understand a company's profitability. But what does it entail, and why should you care about it? Think of an income statement as a report card for a company's financial performance over a specific period – it could be a quarter, a year, or any other duration. This document captures the revenues earned and the expenses incurred during that period, allowing you to see how much money a company made or lost.  Read more >>

This is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly. Read more >>

This is the process by which a private company can go public by sale of its stocks to the general public. It could be a new, young company, or an old company which decides to be listed on an exchange and hence goes public. Read more >>

At its core, interest is the cost of borrowing money. It's the price you pay for the privilege of using someone else's cash for a period of time. Conversely, if you're the one lending money - by depositing funds in a bank or buying a bond, for instance - interest is the return you earn for parting with your cash. Read more >>

This refers to the cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any borrowings – bonds, loans, convertible debt or lines of credit. Read more >>

The risk that an investment's value will change due to a change in the absolute level of interest rates.

Interest Rate Risk is a vital concept in both accounting and corporate finance. It refers to the potential for investment losses due to a change in interest rates. Interest rate risk directly affects the value of bonds more than any other investment. It is crucial for businesses and investors to understand interest rate risk as it impacts investment, funding costs, and overall financial strategy.

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It is an international organization that aims to promote global economic growth and financial stability, to encourage international trade, and to reduce poverty. Read more >>

In essence, an investment is the act of allocating resources, usually in the form of money, with the expectation of generating an income or profit over time. It's about forgoing immediate gratification to reap greater rewards in the future. Read more >>

This is a field of study that seeks to understand and explain investor behavior. It is also known as behavioral finance. It focuses on the cognitive and emotional aspects of investing in an attempt to understand why investors make irrational investment decisions. Read more >>

A ratio showing how many times a company's inventory is sold and replaced over a period.

Inventory Turnover is a critical metric in both accounting and corporate finance, representing how frequently a business sells and replaces its inventory within a given period. It's a measure of a company's efficiency in managing its stock of goods.

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This is a financial term used to describe the way that a business acquires new assets. When a business is "leveraged," it means that the business has borrowed money to finance the purchase of new assets. Read more >>

These are the debts and obligations of a business or an individual. Liabilities represent claims by other parties aside from the owners against the assets of a company. Read more >>

This refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Read more >>

This is the total dollar market value of a company's outstanding shares of stock. It is calculated by multiplying a company's shares outstanding by the current market price of one share. Read more >>

These are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or combined. Read more >>

This is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country. Read more >>

These are investment vehicles managed by finance professionals that allow investors to pool their money together to invest in securities. Mutual funds are valued at the end of trading day and any transactions to buy or sell shares are executed after the market close as well. Read more >>

In simple terms, net income refers to a company's total earnings or profit. It's the amount of money that a company has left over after subtracting all its expenses from its total revenue. Think of it as the bottom line on a company's income statement - it tells you how much profit a company has made during a specific period. Read more >>

This refers to a company's total earnings (or profit). Net profit is calculated by subtracting total expenses from total revenues. It is a key profitability metric for a company. Read more >>

A key profitability metric for a company. It is calculated by dividing net profit by revenue.

Net Profit Margin is a crucial metric in accounting and corporate finance, indicating the percentage of revenue that a company retains as net income after all expenses have been deducted from its total revenue. It serves as a reliable indicator of a company's financial health, profitability, and operational efficiency.

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An options contract is a type of derivatives contract that gives the holder the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date. Read more >>

Cash generated from the operations of a company, generally defined as revenues less all operating expenses, but calculated through a series of adjustments to net income.

Operating Cash Flow (OCF) is a measure in accounting and corporate finance that represents the cash generated from a company's regular business operations. It provides a clear picture of the company's ability to generate sufficient cash to maintain and grow its operations, as well as pay off its short-term liabilities. 

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In the simplest of terms, operating expenses are the costs associated with running a company's core operations. They're the necessary expenditures that keep the day-to-day business activities going. Think of operating expenses as the fuel that keeps a company's engine running smoothly.

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This is the profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold (COGS). It serves as an indicator of a company’s operational profitability and efficiency. Read more >>

This is operating income divided by revenues. It shows what proportion of revenues is left over after paying for variable costs of production.

Operating margin is a critical financial metric that provides insight into a company's profitability and operational efficiency. It is calculated by dividing operating income by revenue, and is usually expressed as a percentage. Operating margin is particularly important as it strips out any extraneous factors and focuses solely on a business's core operations, like production and selling. A high operating margin implies that a company is efficiently managing its costs and successfully turning sales into profits. Therefore, it serves as a key indicator for potential investors and stakeholders, offering a clear picture of a company's financial health and its potential for long-term success.

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The cost of forgoing the next best alternative when making a decision. If you choose to invest in one stock over another, the opportunity cost is the potential return you missed out on from the other stock.

Opportunity Cost is a fundamental concept in accounting and corporate finance. It refers to the potential benefit that is forgone when one alternative is selected over another. In business, understanding opportunity cost is crucial for decision-making, resource allocation, and strategic planning.

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A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, as well as their fund counterparts.

A Portfolio, in the context of finance and investing, refers to a collection of financial investments like stocks, bonds, commodities, cash equivalents, and fund units held by an individual or a corporate entity. It serves as the foundation of an investment strategy, designed to achieve specific financial goals.

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This refers to the rate at which the price of an asset, such as a stock, increases or decreases for a set of returns. Volatility is measured by calculating the standard deviation of the annualized returns over a given period of time. Read more >>

This is a valuation ratio of a company's current share price compared to its per-share earnings. The P/E ratio is commonly used to determine the market's expectation of a company's future growth. Read more >>

This is a measure of the average change over time in the selling prices received by domestic producers for their output. It serves as an indicator of economic health and potential inflationary pressures. Read more >>

This refers to capital investment made into private companies, or the acquisition of private companies, by financial institutions or individual investors. The funds raised by private equity firms are used to buy and restructure companies that aren't publicly traded. Read more >>

This is a profitability ratios calculated as net income divided by revenue, or net profits divided by sales. It represents what percentage of sales has turned into profits. Read more >>

An indicator of a company’s short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets.

The Quick Ratio, also known as the Acid-Test Ratio, is a financial metric widely used in accounting and corporate finance to measure a company's short-term liquidity position. It indicates how well a company can meet its short-term financial liabilities without selling inventory. The Quick Ratio is calculated by subtracting inventories from current assets and then dividing by current liabilities.

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The portion of net profits which are being retained by the company rather than distributed to its owners as dividends.

Retained earnings represent the net income that a company keeps after distributing dividends to its shareholders. This account in corporate finance and accounting is crucial as it is often reinvested in the business for growth opportunities or used to pay off debt. Read more >>

This is a financial ratio that shows the percentage of profit a company earns in relation to its overall resources. It gives an idea as to how efficient management is at using its assets to generate earnings. Read more >>

This is a measure of financial performance reflecting the profitability of a business in relation to the equity. It is calculated by dividing net income by shareholder's equity. Read more >>

This is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments. ROI measures the return of an investment relative to the cost of the investment. Read more >>

The total amount of money generated by the sale of goods or services related to the company's primary operations. Read more >>

This measures the financial returns of an investment adjusted for the risk or volatility involved in achieving those returns. Higher risk-adjusted returns indicate better investment decisions. Read more >>

This refers to the process of identifying, assessing and controlling threats to an organization's capital and earnings. It involves evaluating the financial risks in investment decisions and implementing strategies to mitigate or manage these risks. Read more >>

This is the degree of variability in investment returns that an investor is willing to withstand in their financial planning. An investor's risk tolerance can be determined by their time horizon, investment objectives, life stage, personality, knowledge of investments, and past experience. Read more >>

The income from a company's core business operations, excluding deductions of discounts and returns.

Sales Revenue is the primary source of income for a business, generated from the sale of goods or services to customers. It is a fundamental financial indicator that reflects a company's operational success and market position.

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This is a governmental body that regulates the securities industry, which includes stocks and bonds, mutual funds, and other investment products. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. Read more >>

This is the act of loaning a stock, derivative or other security to an investor or firm. Securities lending requires the borrower to put up collateral, whether cash, security, or a letter of credit. Read more >>

This is the procedure where an issuer designs a marketable financial instrument by merging or pooling various financial assets into one group. The issuer then sells this group of repackaged assets to investors. Read more >>

These are the individuals or institutions that legally own one or more shares of stock in a public or private corporation. Shareholders may be referred to as members of a corporation. Read more >>

This is the ability of a company to meet its long-term financial obligations. Solvency is important for staying in business as it demonstrates a company’s ability to continue operations into the foreseeable future. Read more >>

These are contracts that grant the holder the right, but not the obligation, to buy or sell a specified quantity of a stock at a specified price within a specific time period. Read more >>

Stocks: Securities that represent an ownership share in a corporation. If you own a company's stock, you own a piece of that company. Read more >>

This is a derivative contract through which two parties exchange financial instruments, often to manage risk. These instruments can be almost anything, but most swaps involve cash flows based on a notional principal amount. Read more >>

In the simplest terms, tangible assets are physical and measurable assets that are used in a company's operations. They include buildings, machinery, inventory, and cash. Think of them as the backbone of a company's operations - they are the physical resources that a company uses to generate revenue. Read more >>

Tax Liability: The total amount of tax debt owed by an individual, corporation or other entity to a taxing authority. Read more >>

This occurs when a country's imports exceed its exports during a given time. It is an economic measure of a negative balance of trade. Read more >>

This refers to the shares a company keeps in its own treasury. Treasury stock can be a result of a repurchase or buyback from shareholders; or it never issued to the public in the first place. These shares don't pay dividends, have no voting rights, and should not be included in shares outstanding calculations. Read more >>

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

The Time Value of Money (TVM) is a fundamental concept in finance and accounting that describes the idea that money available today is worth more than the same amount in the future due to its potential earning capacity. Understanding the TVM is crucial in the realm of business and investing as it aids in evaluating investment opportunities, taking financial decisions, and enhancing financial planning.

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This is a process through which financial service providers, such as banks and insurers, assess the eligibility of a customer to receive their products like loans or insurance. Underwriters review the risk factors associated with the potential client and decide the terms of coverage. Read more >>

This is a key indicator of national economic health, calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. It serves as a measure of joblessness and can influence both economic policy and fiscal decisions. Read more >>

This refers to the analytical process of determining the current or projected worth of an asset or a company. There are several techniques for valuation, and it's used by financial market participants to decide on the price they are willing to pay or receive to affect a sale of a business. Read more >>

Costs that change in proportion to the good or service that a business produces.

Variable costs are expenses that change in proportion to the production output or activity level of a business. Unlike fixed costs, which remain constant irrespective of a company's level of output, variable costs fluctuate based on the volume of goods or services produced.

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Venture capital refers to a form of private equity investment in early-stage or high-growth companies with significant growth potential. It involves providing financial funding, expertise, and support to startups or emerging businesses that have innovative ideas, strong growth prospects, and the potential for high returns.

 Venture capital typically involves professional investors, known as venture capitalists, who pool together funds from various sources, such as high-net-worth individuals, institutional investors, or corporate entities. These venture capitalists then invest in promising startups in exchange for an equity stake in the company.

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A statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security.

Volatility, a crucial concept in finance and investing, refers to the degree of variation in a financial instrument's trading price over a certain period of time. In essence, it represents the rate at which the price of an asset increases or decreases for a set of returns. Volatility is often measured in terms of standard deviation or variance between returns.

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This is the average rate of return a company is expected to provide to all its investors. The WACC is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital. Read more >>

A measurement of a company's short-term liquidity and operational efficiency. It is calculated as current assets divided by current liabilities.

The Working Capital Ratio, also known as the Current Ratio, is a fundamental concept in accounting and corporate finance. It measures a company's short-term liquidity by comparing its current assets to its current liabilities. The ratio helps in determining whether a company has enough short-term assets to cover its short-term debt. Read more >>

This is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group. Read more >>

Yield: The income return on an investment, such as the interest received from holding a security. Typically expressed annually as a percentage based on the investment's cost or current market value. Read more >>