Financial Statements
A report that summarizes a company's revenues and expenses over a period, showing profit or loss.
What is an income statement?
An asset pledged by a borrower to secure a loan, which can be seized by the lender if the borrower defaults.
What is collateral?
A measure of profitability that calculates the return generated relative to the cost of an investment.
What is a return on investment? (ROI)
Liquid money held by a company, including physical currency and funds in bank accounts.
What is cash?
Business activities where companies combine or one company purchases another.
What are mergers & acquisitions?
A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.
What is a balance sheet?
An arrangement with a financial institution allowing a business to borrow up to a certain limit as needed.
What is a line of credit?
A financial ratio indicating how effectively a company generates profit using shareholders’ equity.
What is a return on equity (ROE)?
Money owed to a company by customers for goods or services delivered on credit.
Funding provided to startups or early-stage companies with high growth potential by investors in exchange for equity.
What is venture capital?
A document issued by a seller to a buyer detailing the products or services provided and the amount owed.
What is an invoice?
Funds raised by a company through the sale of ownership shares (stock).
What is equity capital?
Calculations that measure a company's performance, liquidity, profitability, or solvency (e.g., debt-to-equity ratio).
What are financial ratios?
Long-term tangible assets such as property, plant, and equipment used in operations.
What are fixed assets?
Payments made to shareholders from a company’s profits, typically on a regular basis.
What are dividends?
A financial statement detailing cash inflows and outflows from operating, investing, and financing activities.
What is a cash flow analysis statement?
Funds borrowed by a company through loans, bonds, or other forms of debt.
What is debt capital?
Metrics that assess a company's ability to meet short-term obligations (e.g., current ratio, quick ratio).
What are liquidity ratios?
Assets that can be easily converted into cash without significant loss of value (e.g., stocks, bonds).
What are liquid assets?
The total market value of a company's outstanding shares, calculated as share price multiplied by the number of shares.
What is market capitalization?
A complete list of a company's financial accounts used for organizing transactions and creating financial reports.
What is a chart of accounts?
A financial arrangement where a business sells its accounts receivable to a third party at a discount for immediate cash.
What is factoring?
A ratio that shows the percentage of revenue remaining as profit after deducting expenses.
What is a profit margin?
Assets that cannot be quickly converted to cash, often requiring time and effort to sell (e.g., real estate).
What are illiquid assets?
Funds used by a company to acquire or upgrade physical assets like property, buildings, or equipment.
What is capital expenditure (CapEx)?