Finance
51 terms with concise definitions
Asset Turnover
TermRatio that measures how efficiently a business uses assets to generate revenue.
Break-even Point
TermLevel of sales at which total revenue equals total costs.
Cash Flow
TermMovement of cash in and out of a business over a period.
Current Ratio
TermLiquidity ratio that compares current assets to current liabilities.
EBITDA
TermEarnings before interest, taxes, depreciation, and amortization.
Escrow Account
TermAccount held by a third party to secure funds pending a transaction.
Foreign Direct Investment (FDI)
TermInvestment by a foreign entity into an Indian business.
Government Subsidy
TermFinancial support from government to encourage specific activities.
Gross Margin
TermPercentage of revenue remaining after deducting cost of goods sold.
Gross Turnover
TermTotal revenue earned before deductions.
Hire Purchase
TermAsset financing arrangement where ownership transfers after final payment.
Hundi
TermTraditional negotiable instrument used for credit and trade in India.
J-Curve
TermInvestment pattern where returns are negative initially then improve.
Keyman Insurance
TermInsurance policy on critical employees to protect the business.
Margin Money
TermMinimum contribution required from a borrower in a financed purchase.
Microfinance
TermFinancial services offered to low-income individuals or small businesses.
Net Present Value (NPV)
TermPresent value of future cash flows minus initial investment.
Net Profit
TermProfit remaining after all expenses and taxes are deducted.
Net Worth
TermTotal assets minus total liabilities.
Operating Expenses (OPEX)
TermRegular expenses required to run day-to-day operations.
Operating Profit
TermProfit from core business operations before interest and tax.
Opportunity Cost
TermBenefit lost by choosing one alternative over another.
Qualified Institutional Buyer (QIB)
TermInvestor category allowed to participate in certain capital market issues.
Quick Assets
TermCurrent assets that can be quickly converted into cash.
Quick Ratio
TermLiquidity ratio that excludes inventory from current assets.
Return on Equity (ROE)
TermMeasure of profitability relative to shareholder equity.
Revenue
TermIncome generated from business operations before expenses.
Turnover
TermTotal sales or revenue generated during a period.
Underwriting
TermProcess of assessing and accepting risk for insurance or securities.
Unsecured Loan
TermLoan not backed by collateral.
Utilization
TermUse of funds or resources for intended purposes.
Valuation
TermProcess of estimating the economic value of a business or asset.
Venture Capital
TermEquity funding provided to high-growth startups.
Virtual CFO
TermOutsourced CFO service providing strategic financial oversight.
Voluntary Contribution
TermOptional payment made to a fund or organization without obligation.
Working Capital
TermDifference between current assets and current liabilities.
X-Coupon
TermBond sold without the right to receive the next coupon payment.
X-Dividend Date (Ex-Dividend)
TermDate after which a buyer is not entitled to the declared dividend.
X-Interest Date (Ex-Interest)
TermDate after which accrued interest does not pass to the buyer.
X-Rate (Exchange Rate)
TermRate at which one currency can be exchanged for another.
X-Rights
TermShare trading status where the buyer does not get rights entitlement.
XIRR
TermExtended Internal Rate of Return for irregular cash flows.
Year-on-Year (YoY)
TermComparison of a metric with the same period in the previous year.
Year-to-Date (YTD)
TermPeriod from the start of the year up to the current date.
Yield
TermReturn earned on an investment, usually expressed as a percentage.
Yield Curve
TermGraph showing yields of bonds with different maturities.
Yield Spread
TermDifference in yields between two debt instruments.
Yield to Maturity (YTM)
TermTotal expected return on a bond if held until maturity.
Z-Score (Altman)
TermModel used to estimate the likelihood of business bankruptcy.
Zero Coupon Bond
TermBond issued at a discount with no periodic interest payments.
Zero-based Budgeting
TermBudgeting method where expenses must be justified from zero each period.