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GLOSSARY CATEGORY

Finance

51 terms with concise definitions

Asset Turnover

Term

Ratio that measures how efficiently a business uses assets to generate revenue.

Break-even Point

Term

Level of sales at which total revenue equals total costs.

Cash Flow

Term

Movement of cash in and out of a business over a period.

Current Ratio

Term

Liquidity ratio that compares current assets to current liabilities.

EBITDA

Term

Earnings before interest, taxes, depreciation, and amortization.

Escrow Account

Term

Account held by a third party to secure funds pending a transaction.

Foreign Direct Investment (FDI)

Term

Investment by a foreign entity into an Indian business.

Government Subsidy

Term

Financial support from government to encourage specific activities.

Gross Margin

Term

Percentage of revenue remaining after deducting cost of goods sold.

Gross Turnover

Term

Total revenue earned before deductions.

Hire Purchase

Term

Asset financing arrangement where ownership transfers after final payment.

Hundi

Term

Traditional negotiable instrument used for credit and trade in India.

J-Curve

Term

Investment pattern where returns are negative initially then improve.

Keyman Insurance

Term

Insurance policy on critical employees to protect the business.

Margin Money

Term

Minimum contribution required from a borrower in a financed purchase.

Microfinance

Term

Financial services offered to low-income individuals or small businesses.

Net Present Value (NPV)

Term

Present value of future cash flows minus initial investment.

Net Profit

Term

Profit remaining after all expenses and taxes are deducted.

Net Worth

Term

Total assets minus total liabilities.

Operating Expenses (OPEX)

Term

Regular expenses required to run day-to-day operations.

Operating Profit

Term

Profit from core business operations before interest and tax.

Opportunity Cost

Term

Benefit lost by choosing one alternative over another.

Qualified Institutional Buyer (QIB)

Term

Investor category allowed to participate in certain capital market issues.

Quick Assets

Term

Current assets that can be quickly converted into cash.

Quick Ratio

Term

Liquidity ratio that excludes inventory from current assets.

Return on Equity (ROE)

Term

Measure of profitability relative to shareholder equity.

Revenue

Term

Income generated from business operations before expenses.

Turnover

Term

Total sales or revenue generated during a period.

Underwriting

Term

Process of assessing and accepting risk for insurance or securities.

Unsecured Loan

Term

Loan not backed by collateral.

Utilization

Term

Use of funds or resources for intended purposes.

Valuation

Term

Process of estimating the economic value of a business or asset.

Venture Capital

Term

Equity funding provided to high-growth startups.

Virtual CFO

Term

Outsourced CFO service providing strategic financial oversight.

Voluntary Contribution

Term

Optional payment made to a fund or organization without obligation.

Working Capital

Term

Difference between current assets and current liabilities.

X-Coupon

Term

Bond sold without the right to receive the next coupon payment.

X-Dividend Date (Ex-Dividend)

Term

Date after which a buyer is not entitled to the declared dividend.

X-Interest Date (Ex-Interest)

Term

Date after which accrued interest does not pass to the buyer.

X-Rate (Exchange Rate)

Term

Rate at which one currency can be exchanged for another.

X-Rights

Term

Share trading status where the buyer does not get rights entitlement.

XIRR

Term

Extended Internal Rate of Return for irregular cash flows.

Year-on-Year (YoY)

Term

Comparison of a metric with the same period in the previous year.

Year-to-Date (YTD)

Term

Period from the start of the year up to the current date.

Yield

Term

Return earned on an investment, usually expressed as a percentage.

Yield Curve

Term

Graph showing yields of bonds with different maturities.

Yield Spread

Term

Difference in yields between two debt instruments.

Yield to Maturity (YTM)

Term

Total expected return on a bond if held until maturity.

Z-Score (Altman)

Term

Model used to estimate the likelihood of business bankruptcy.

Zero Coupon Bond

Term

Bond issued at a discount with no periodic interest payments.

Zero-based Budgeting

Term

Budgeting method where expenses must be justified from zero each period.