Financial Terms
This is the term for money that a person or business owes to another party.
Debt
The general term for ownership in a company.
Stocks
The term for a company’s plan on how it will manage its cash, investments, and debt.
Financial management
What is gross income?
The study of how individuals and businesses make choices about the use of resources.
What is economics?
This term refers to the difference between assets and liabilities on a company's balance sheet.
Equity
The place where buyers and sellers exchange stocks.
Stock exchange
This type of financing involves raising capital by selling shares in the company.
Equity financing
The term for saving a percentage of your income for unexpected expenses.
What is an emergency fund?
This is a basic economic problem that results from limited resources and unlimited wants.
What is scarcity?
A financial statement that shows a company's income and expenses over a period of time.
Income Statement
The term for a company's first sale of stock to the public.
Initial public offering (IPO)
This is the practice of evaluating potential investment projects by estimating their future cash flows.
Capital budgeting
This type of account is used to grow your money over time by earning interest, often for retirement.
What is an investment account?
The general increase in prices and fall in the purchasing value of money over time.
What is inflation?
This term refers to the reduction in the value of an asset over time, commonly used for fixed assets.
Depreciation
This term refers to a period in which stock prices are rising, often associated with investor confidence.
Bull market
This term refers to borrowing money to finance a project, often used in large investments.
Leverage
This is the score used by lenders to assess the risk of lending money to an individual.
What is a credit score?
This is the total market value of all goods and services produced in a country in one year.
What is Gross Domestic Product (GDP)?
The calculation used to evaluate the potential profitability of an investment, expressed as a percentage.
Return on investment (ROI)?
A popular method to reduce risk by spreading investments across various assets.
Diversification
This measure helps assess the company’s financial health by determining how easily it can cover its interest expenses.
Coverage ratio
This is a retirement savings plan offered by many employers, where contributions may be matched by the employer.
401(k)
A situation where one company controls the majority of the market for a product or service.
What is a monopoly?