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Browse terms alphabetically or search directly for what you are looking for.
Accounting method that includes all manufacturing costs in the cost of a product.
Liabilities of a business, representing its obligations to pay off a short-term debt to its creditors. It reflects the amounts owed to suppliers or vendors for goods or services received that are not yet paid.
Amounts due to a firm for goods or services that have been delivered but not yet paid for. This is a key component of a company's working capital and liquidity analysis.
Recording revenues and expenses when they are incurred, regardless of when cash transactions occur. This accounting method provides a more accurate picture of financial performance by matching revenues with related expenses.
Costing method that assigns overhead and indirect costs to related products and services.
Gradual reduction of a debt or the spreading out of capital expenses over a period of time. It allocates the cost of intangible assets over their useful life, impacting a company’s long-term financial health.
Predictable revenue that a business expects to receive from its customers annually. This metric is especially important for businesses with subscription-based models.
Related Terms:
Accounts payableResource with economic value owned by a corporation, expected to provide future benefit. Assets are critical to a company's operations and future earnings.
Systematic process of operating, maintaining, and upgrading assets cost-effectively. Effective asset management maximizes value and ensures optimal utilization of resources.
Financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue. A higher ratio indicates better performance in using assets to generate sales.
Amount owed to a company that is unlikely to be paid and, therefore, written off as a loss. It represents a financial loss for the company and affects the net income.
Financial statement showing a company's assets, liabilities, and shareholders' equity. It provides a snapshot of a company’s financial position at a given point in time.
Study of the assets, liabilities, and equity of a company as presented in its balance sheet. This analysis helps in understanding the company’s financial strength and capabilities.
Performance management tool that measures financial and non-financial performance aspects.
Process of comparing a company's performance metrics to industry bests or best practices. It helps in identifying areas of improvement and strategic planning.
Measurement of the volatility of a stock or portfolio compared to the market as a whole. It is a key component in the Capital Asset Pricing Model (CAPM) to calculate investment risk.
Calculation to determine the number of units or revenue needed to cover total costs. It identifies the point at which a business neither makes a profit nor a loss.
Production level at which total revenues equals total expenses. Achieving the breakeven point is crucial for a business to start generating profit.
Estimation of revenue and expenses over a specified future period, often compiled and re-evaluated periodically. It's a fundamental tool for financial planning and control.
Technologies, applications and practices for the collection, integration, analysis, and presentation of business information. It helps in making informed business decisions based on data.
Process and set of procedures used to estimate the economic value of an owner’s interest in a business. It is critical for financial reporting, business sales, and mergers.
Process of assigning financial resources to different areas of a business or investment portfolio. Effective capital allocation is key to maximizing returns and growth.
Process by which a business determines and evaluates potential large expenses or investments. It involves the assessment of investment proposals and their long-term benefits.
Measure of how effectively a company uses its capital to generate profits. Higher capital efficiency indicates a more profitable and sustainable business.
Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment. CapEx is essential for a company’s growth and maintaining competitive advantage.
Increase in the value of a capital asset that gives it a higher worth than the purchase price.
Financial markets for buying and selling equity and debt instruments. They play a crucial role in helping companies raise capital and investors make informed decisions.
How a firm finances its overall operations and growth by using different sources of funds. It involves the balance between debt and equity financing.
Time it takes for a company to convert its investments in inventory into cash flows from sales. This cycle plays a crucial role in managing a company's working capital and liquidity.
Company's cash revenues minus cash expenses, an indicator of financial performance.
Total amount of money being transferred into and out of a business, especially as affecting liquidity. It's a key indicator of a company's financial health, showing the net amount of cash and cash-equivalents moving in and out.
Process of estimating a company's future financial liquidity over a specific time frame. It helps businesses plan for future financial obligations and investment opportunities.
Measure of how efficiently a company converts its sales to cash.
Financial metric that measures the cash profitability of a company.
Financial statement that shows how changes in balance sheet accounts affect cash and cash equivalents. It provides insights into a company’s operational, investment, and financing cash flows.
Process of managing a company's cash inflows and outflows, often through budgeting. Effective cash management ensures that a company has enough liquidity to meet its obligations.
Time between the initial outlay of cash to produce goods and the collection of cash from customers. It is a key measure of a company's efficiency in managing its cash cycle.
Liquidity ratio that measures a company's ability to pay off short-term liabilities with cash and cash equivalents.
Process of combining financial statements of different subsidiaries within a single parent company. This creates a clearer overall financial picture of a corporate group.
Revenue remaining after deducting variable costs, contributing to covering fixed costs and profit. It's vital for understanding the profitability of individual products or services.
Area of finance focusing on the financial decisions that businesses make and the tools and analysis used to make these decisions. It encompasses capital structure, funding strategies, and financial risk management.
Accounting method that captures a company's costs of production by assessing input costs of each step of production. It's essential for budgeting and setting product prices.
The cost of funds used for financing a business, often used in evaluating new projects of a company. It represents the return rate that could have been achieved if the funds were invested elsewhere.
Return that a company requires to decide if an investment meets capital return requirements.
Total production cost of goods completed during a specific period.
Direct costs attributable to the production of the goods sold in a company. It includes material and labor costs and is key to determining gross profit.
Total sum of all wages paid to employees.
Direct costs attributable to the production of the goods sold in a company. It’s similar to COGS but may include additional costs like distribution and sales force expenses.
Process used to measure the benefits of a decision or taking action minus the costs associated with taking that action. It aids in evaluating the feasibility and profitability of a project.
Method to analyze the impact of varying levels of sales and product costs on operating profit.
Financial metrics used to assess a company's ability to pay its financial obligations.
Evaluation of the ability of a company or individual to repay their debts. It involves assessing the creditworthiness of potential borrowers.
Process of granting credit, managing the credit that is extended, and collecting payments on credit accounts. It’s crucial for maintaining a company’s cash flow and reducing bad debts.
Evaluation of a potential borrower's ability to repay debt, prepared by a credit bureau at the request of the lender. It affects a company’s ability to borrow and the interest rates it pays.
Risk of loss due to a borrower's failure to make payments on any type of debt.
Risk of value change of foreign currencies that a company holds, due to changes in currency exchange rates. It's significant for companies involved in international trade.
Assets that are expected to be converted into cash, sold or consumed within a year. They include cash, inventory, and receivables and are essential for liquidity management.
Accounting method where assets are valued at current replacement cost, not historical cost.
Obligations a company is expected to pay within one year or within its normal operating cycle. They are crucial for assessing a company’s short-term financial health.
Liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It's a key indicator of a company’s financial stability.
Amount of money borrowed by one party from another, used to make large purchases. It is a crucial part of a company's capital structure and affects its risk profile.
Agreement between a borrower and a lender that requires certain thresholds to be maintained.
Funds raised through various forms of borrowing that must be repaid with interest. It’s a common way for businesses to raise capital for growth or operations.
Cash required over a given period for the repayment of interest and principal on a debt.
Measure of the cash flow available to pay current debt obligations. It’s important for lenders and investors to assess a company's ability to service its debt.
Measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.
Payments received by a company for goods or services yet to be delivered or provided.
Tax liability that a company owes but does not have to pay until a later date.
Accounting method of allocating the cost of a tangible asset over its useful life.
Various methods a company uses to account for the wearing out or obsolescence of its assets.
Costs that can be directly tied to the production of specific goods or services, such as labor and materials.
Interest rate used to discount future cash flows to their present value.
Valuation method used to estimate the value of an investment based on its expected future cash flows.
Process of determining the present value of a payment or a stream of payments that is to be received in the future.
Share of profits distributed to shareholders, typically on a regular basis.
Company's strategy or policy regarding the distribution of profits to shareholders in the form of dividends.
Investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement.
Financial analysis framework for analyzing a company's return on equity.
Accounts Payable
Indicator of a company's profitability, calculated as revenue minus expenses, excluding tax and interest.
Measure of a company's overall financial performance, excluding interest, taxes, depreciation, and amortization.
Measure of a company's annual growth rate in its earnings per share.
Portion of a company's profit allocated to each outstanding share of common stock.
The earnings of a company expressed as a percentage of the market price of its stock.
Amount of capital that a company needs to ensure that it stays solvent given its risk profile.
Ideal order quantity a company should purchase to minimize its total costs related to inventory.
Company's total revenue minus its explicit and implicit costs.
Measure of a company's financial performance based on the residual wealth calculated from invested capital.
Financial metrics that measure a company's ability to use its assets and manage its liabilities effectively.
Theory that all available information is already reflected in a security's price.
Integrated management of main business processes, often in real-time and mediated by software.
Total value of a company, including market capitalization, short-term and long-term debt, and any cash on the company's balance sheet.
Value of the shares issued by a company, representing ownership interest.
Process of raising capital through the sale of shares.
Accounting technique used when a company owns a significant but not majority interest in another company.
Financial leverage ratio that measures the portion of company’s assets financed by stockholders.
Process of determining the fair market value of a company's equity.
Money spent or costs incurred in an organization's efforts to generate revenue.
Accounts Payable
Accounts Payable
Accounts Payable
Assessment of the viability, stability, and profitability of a business, sub-business, or project.
Process and procedures used to manage and monitor financial resources of a company.
Application of mathematical methods to the solution of financial problems.
Process of estimating or predicting how a business will perform in the future.
Use of borrowed funds (debt) to finance the acquisition of assets, with the expectation that the income or capital gains will exceed the borrowing cost.
Process of creating a summary of a company's expenses and earnings in the form of a spreadsheet.
Process of determining how a business will afford to achieve its strategic goals and objectives.
This is a corporate function focused on financial forecasting, budgeting, and comprehensive analysis to support strategic decision-making.
Practice of protecting economic value in a firm by managing exposure to risk, particularly credit and market risk.
Process of reviewing and analyzing a company's financial statements to make better economic decisions.
One-year period that companies and governments use for financial reporting and budgeting.
Efficiency ratio that indicates how well or efficiently a business uses fixed assets to generate sales.
Long-term tangible assets used in a company's operations with a useful life of more than one year.
Any type of fixed expense that recurs on a regular basis.
Ratio that indicates a firm's ability to meet fixed financing expenses such as interest and leases.
Business expenses that are not dependent on the level of goods or services produced.
Process of making predictions about the future based on past and present data.
Risk of a firm's financial position changing due to changes in exchange rates.
The fluctuating rate at which one currency can be exchanged for another.
Risk of financial loss due to fluctuations in foreign exchange rates.
Amount of cash a company generates after accounting for capital expenditures.
Process of measuring a security's intrinsic value by examining related economic and financial factors.
Financial support or resources provided for activities, programs, or projects.
Financial instruments giving the buyer the right, but not the obligation, to buy or sell an asset at a set price on a future date.
Collection of commonly-followed accounting rules and standards for financial reporting.
Financial ratio that compares owner's equity to borrowed funds.
Accounting principle that a company will continue to operate in the foreseeable future.
Intangible asset that arises when one company purchases another for a premium value.
Total income from all sources before deductions or taxes.
Difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.
Company's total revenue minus its cost of goods sold, representing the profit made before deducting operating expenses.
Measure of a company's or industry's financial performance over a specific period, typically annually.
An assessment of current business conditions to plan for future staffing needs.
Use of financial instruments or market strategies to offset the risk of any adverse price movements.
Financial analysis technique that shows changes in the amounts of corresponding financial statement items over a period.
Global accounting standards for preparing financial statements.
Accounting principle describing a permanent reduction in the value of a company's asset.
Accounting principle that dictates the process and timing by which revenue is recorded and recognized as income.
Financial statement showing a company's revenues and expenses over a specific period.
Tax levied by a government directly on income, especially an annual tax on personal income.
Costs not directly traceable to a specific project or activity, such as overhead costs.
Accounting practice that factors in the impact of inflation on recorded financial statements.
The first time that the stock of a private company is offered to the public.
Measure of a company's ability to meet its interest payments.
Discount rate that makes the net present value (NPV) of all cash flows equal to zero.
Company's raw materials, work-in-progress goods, and completely finished goods.
Method of assigning costs to inventory and cost of goods sold.
Supervision of non-capitalized assets (inventory) and stock items.
Ratio showing how many times a company's inventory is sold and replaced over a given period.
Purchase of goods that are not consumed today but used for future wealth generation.
Collection of techniques used to identify the attractiveness of an investment.
Division of banking that deals with capital creation for other companies, governments, and other entities.
Business arrangement where two or more parties agree to pool their resources for a specific task or business activity.
Quantifiable measure used to evaluate the success of an organization.
Use of borrowed capital for investment, expecting the profits made to be greater than the interest payable.
Financial ratios that measure the degree of a company's use of borrowed funds.
Acquisition of another company using a significant amount of borrowed money.
Availability of liquid assets to a company and the ability to convert an asset to cash quickly.
Assessment of a company's ability to meet its short-term obligations.
Process of managing the liquidity of a firm to ensure it has the necessary cash flow.
Extra amount of return that investors demand for investing in non-liquid assets.
Type of financial ratio used to determine a company's ability to pay off its short-terms debts obligations.
Conditions in a loan agreement that the borrower must comply with.
Process of preparing management reports and accounts that provide accurate financial and statistical information.
Provision of financial information and business metrics to managers within organizations.
Additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.
Cost added by producing one additional unit of a product or service.
Study of the attractiveness and the dynamics of a special market within a special industry.
Total market value of a company's outstanding shares of stock.
Risk of losses in investments due to movements in market factors like interest rates, stock prices, or currencies.
Difference between the market value of a company and the capital contributed by investors.
The importance of financial information in influencing the decision of an investor or creditor.
The final payment date of a loan or other financial instrument.
Aspects of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies.
The process of reviewing and reconciling financial activities for the previous month.
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Accounts Payable
Value of a fund's assets minus the value of its liabilities.
Company's total earnings, reflecting the amount of profit it has made.
Total income from property operations minus the total operating expenses.
Difference between the present value of cash inflows and the present value of cash outflows.
Amount of cash generated by a company's normal business operations.
Average period of time required for a business to make an initial outlay of cash to produce goods, sell the goods, and receive cash from customers.
A measure of what it costs to operate a piece of property compared to the income that the property brings in.
Expenses that are not directly tied to the production of goods or services.
Amount of profit realized from a business's operations after deducting operating expenses.
Degree to which a firm or project can increase operating income by increasing revenue.
Ratio used to measure a company's pricing strategy and operating efficiency.
Cost of an alternative that must be forgone in order to pursue a certain action.
Ongoing business expenses not directly attributed to creating a product or service.
Valuation metric for determining the relative trade-off between the price of a stock, its earnings per share, and the company's expected growth.
Time required for the return on an investment to repay the original cost.
Management of a company's employee compensation and related taxes, benefits, and other payments.
Budgeting method that focuses on the outcomes and results of the activities.
Measurements that evaluate the effectiveness of a company or its investments.
Process of making decisions about investment mix and policy, aligning investments to objectives, and balancing risk against performance.
Future expenses that have been paid in advance.
Valuation ratio of a company's current share price compared to its per-share earnings.
Valuation ratio comparing a firm's market value to its book value.
Total cost of direct materials and direct labor for manufacturing.
Financial statements based on hypothetical scenarios or assumptions.
Financial statement that summarizes revenues, costs, and expenses incurred during a specific period.
Financial metric used to assess a company's financial health by revealing the proportion of money left over from revenues after accounting for certain costs.
Financial metrics used to assess a business's ability to generate earnings.
Long-term financing of infrastructure and industrial projects based on the projected cash flows.
Assets that can be quickly converted into cash.
Indicator of a company's short-term liquidity position, measuring its ability to meet short-term obligations.
Method of valuing the choices that managers will have in the future.
Adherence to laws, regulations, guidelines, and specifications relevant to business processes.
Portion of net earnings not paid out as dividends but reinvested in the business.
Indicator of how profitable a company is relative to its total assets.
Financial ratio that measures a company’s profitability and the efficiency with which its capital is employed.
Measure of the profitability of a business in relation to the equity.
Performance measure used to evaluate the efficiency of an investment.
A financial ratio that measures a company's efficiency in generating profit from its net assets.
Income that a business has from its normal business activities, usually from sales of goods and services.
Measure of how efficiently a company is utilizing its employees.
Principle that revenue should be recognized and recorded when it is earned, not necessarily when it is received.
Identification and analysis of relevant risks to achievement of an organization's objectives, forming a basis for determining how the risks should be managed.
Process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions.
Investment's return analyzed in the context of the risk involved in producing that return.
An alternative planning cycle using a continuous period that allows companies to respond to changes in market or economic conditions quickly.
Process of estimating future sales, crucial for making informed business decisions and predicting short-term and long-term performance.
U.S. law aimed at protecting investors from fraudulent financial reporting by corporations.
Process of analyzing possible future events by considering alternative possible outcomes.
Process of converting an illiquid asset into a security.
Measure of the profitability of different segments of a company.
The practice of dividing a company's financial data into discrete operating segments for reporting purposes.
Technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.
The repurchase of shares by the company that issued them, a way of returning money to investors.
An individual, company, or institution that holds shares in a company.
The amount that would be returned to shareholders if all the company's assets were liquidated and all its debts repaid.
Ability of a company to meet its long-term debts and financial obligations.
Accounting technique that uses standard costs for direct material, labor, and overhead.
Contracts which give the holder the right, but not the obligation, to buy or sell stocks at a specific price.
Process of conducting research on a company and its operating environment to formulate a strategy.
Managing a company's finances with a strategy to achieve its business objectives.
Organizational management activity used to set priorities, focus energy and resources, and strengthen operations.
Cost that has already been incurred and cannot be recovered.
Maximum rate at which a company can grow its sales, earnings, and dividends without increasing its leverage.
Analysis and arrangement of a person's financial situation to maximize tax breaks and minimize tax liabilities.
Concept that money available now is worth more than the same amount in the future due to its earning potential.
Financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system.
The credit extended to a buyer by a supplier who allows them to purchase goods or services and pay for them later.
The administration of a company's liquidity, investments, and risk management.
A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns.
Statistical technique used to measure and quantify the level of financial risk within a firm over a specific time frame.
Corporate expenses that vary in direct proportion to the quantity of output.
An entity in which the investor holds a controlling interest that is not based on a majority of voting rights.
Quantitative investigation of the difference between actual and planned behavior.
Financing that investors provide to startup companies and small businesses believed to have long-term growth potential.
Method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a proportion of the total account.
Measure of a company's operational efficiency and short-term financial health.
Management of a firm's current assets and liabilities to ensure it has sufficient cash flow.
Indicator of whether a company has enough short-term assets to cover its short-term debt.
Graph showing the relationship between bond yields and maturities.
Statistical measure that quantifies the distance (in standard deviations) a data point is from the mean of a data set.
Method of budgeting where all expenses must be justified and approved for each new period.