Financial Glossary

An employer-sponsored retirement savings account, often with tax advantages and employer matching.

Money a company owes to its suppliers for goods or services already received.

Money owed to a company by its customers for goods or services already delivered.

A stricter version of the current ratio that excludes inventory, measuring whether a company can cover short-term debts with its most liquid assets.

An investor who buys a stake in a company to push for changes in its strategy or management.

Using computer programs to execute trades automatically based on pre-set rules and speed.

Spreading the cost of an intangible asset (like a patent) over its useful life.

A recommendation (buy, hold, sell) and price target given by a financial analyst on a stock.

A financial product that pays a fixed stream of income, often used for retirement.

Laws designed to promote competition and prevent monopolies or unfair business practices.

The yearly cost of borrowing money, including interest and fees, expressed as a percentage.

Profiting from a price difference for the same asset in different markets, with little to no risk.

How an investor divides a portfolio among asset classes like stocks, bonds, and cash.

Everything a company owns that has economic value, like cash, property, or inventory.

Government policies that cut spending and raise taxes to reduce debt or a budget deficit.

A financial statement showing a company's assets, liabilities, and equity at a point in time.

A unit equal to 0.01%, used to describe small changes in interest rates. 100 bps = 1%.

A period of falling asset prices, typically a drop of 20% or more, and investor pessimism.

The gap between the highest price a buyer will pay and the lowest price a seller will accept.

A programmed event that cuts Bitcoin's mining reward in half roughly every four years.

A distributed, tamper-resistant digital ledger that records transactions across many computers.

Shares of large, financially stable, well-established companies with a reliable track record.

A group elected by shareholders to oversee a company's management and major decisions.

A loan investors make to a government or company, which pays interest and returns the principal at maturity.

A company's value according to its balance sheet: assets minus liabilities.

When a government spends more money than it collects in revenue during a period.

A period of rising asset prices and investor optimism.

The rate at which a company (often a startup) spends its cash reserves before turning profitable.

Money a company spends on long-term physical assets like property, plants, or equipment.

A measure of a bank's capital relative to its risk, showing its ability to absorb losses.

A large-scale movement of money out of a country, often due to economic or political instability.

A tax on the profit made from selling an asset, like stocks or property, for more than its purchase price.

A financial statement showing how cash moves in and out of a business.

A national institution (like the Fed or ECB) that manages a country's money supply, interest rates, and financial stability.

CEO leads a company's overall strategy; CFO oversees its finances, budgeting, and reporting.

A rule that temporarily halts trading on an exchange after a sharp price drop to prevent panic selling.

A basic raw material or agricultural product, like oil, gold, or wheat, traded on markets.

A prolonged period (often a decade or more) of rising commodity prices driven by sustained demand.

Interest calculated on both the initial principal and the accumulated interest from previous periods.

A tax levied by governments on a company's profits.

The fixed annual interest rate a bond pays, based on its face value.

The most widely used inflation gauge, tracking the price of a basket of consumer goods and services.

A score given by agencies like S&P or Moody's showing how likely a borrower is to repay debt.

A number representing a person's creditworthiness, based on their borrowing and repayment history.

The process of validating blockchain transactions using computing power, which also creates new coins.

A digital currency secured by cryptography and typically run on a decentralized blockchain network.

A policy of fixing a currency's exchange rate to another currency, like the US dollar.

A country's balance of trade, income, and transfers with the rest of the world.

Current assets divided by current liabilities, measuring a company's ability to pay short-term debts.

A company's total debt divided by shareholder equity, measuring financial leverage.

Failing to make required payments on a debt obligation.

Financial services (lending, trading) built on blockchains without traditional banks as intermediaries.

A sustained fall in the general price level, often linked to weak demand in the economy.

Spreading the cost of a physical asset (like machinery) over its useful life as it loses value.

A severe, prolonged recession marked by very high unemployment and a sharp drop in output.

A financial contract whose value is based on an underlying asset, like a stock, commodity, or currency.

A deliberate downward adjustment of a country's currency value, usually against a fixed peg.

An app or device used to store and manage digital currency or payment information securely.

When a new product or business model radically changes or replaces an existing market.

Spreading investments across different assets to reduce overall risk.

A portion of a company's profit paid out to shareholders, usually in cash.

Annual dividends per share divided by the share price, shown as a percentage.

A tone or stance from a central bank that favors supporting growth, usually through lower interest rates.

A conference call where a company discusses its recent financial results with investors and analysts.

A company's own forecast of its future earnings or revenue, given to investors.

Earnings before interest, taxes, depreciation, and amortization — a proxy for core operating profit.

Restrictions imposed by one country on another to pressure it politically, often limiting trade or finance.

Cost advantages a company gains as it increases production, lowering the per-unit cost.

Savings set aside to cover unexpected expenses or a loss of income.

Developing economies that are growing quickly and becoming more integrated with global markets.

A company's profit divided by its number of outstanding shares.

Ownership value in a company, calculated as assets minus liabilities; also used for stocks in general.

A framework for evaluating companies on environmental, social, and governance practices, not just profit.

A fund that holds a basket of assets and trades on an exchange like a regular stock.

The value of one currency expressed in terms of another.

The interest rate at which US banks lend to each other overnight; the Fed's main tool for steering the economy.

Technology used to improve or automate financial services, like mobile banking or payment apps.

Government use of spending and taxation to influence the economy, decided by the government rather than the central bank.

When a lender takes possession of a property because the borrower failed to make mortgage payments.

A banking system where banks keep only a fraction of deposits as reserves and lend out the rest.

Cash a company generates after covering operating expenses and capital expenditures.

A pact between countries that reduces or removes tariffs and trade barriers between them.

Evaluating a company's financial health, industry, and economy to estimate its true value.

An agreement to buy or sell an asset at a set price on a future date.

The total monetary value of all goods and services produced within a country in a given period.

A labor market of short-term, freelance, or on-demand work rather than permanent jobs.

The growing interconnection of the world's economies through trade, investment, and technology.

Total output produced by a country's citizens and companies, including that earned abroad.

An intangible asset representing the premium paid for a company above its net asset value, often from brand value or reputation.

Revenue minus the cost of goods sold, shown as a percentage of revenue.

When efforts to slow inflation tip the economy into a recession.

A tone or stance from a central bank that favors fighting inflation, usually through higher interest rates.

A pooled investment fund that uses varied, often risky strategies to generate high returns.

An acquisition attempt made against the target company's management's wishes, often via a tender offer.

A rapid, unsustainable rise in home prices, often followed by a sharp decline.

A global institution that lends to countries facing balance-of-payments problems and monitors the world economy.

A limit on the quantity of a good that can be imported during a period.

A financial statement showing revenue, expenses, and profit over a period of time.

A fund designed to track the performance of a market index, like the S&P 500.

A sustained rise in the general price level, which reduces the purchasing power of money.

Illegally trading a stock based on material, non-public information about the company.

The cost of borrowing money, or the return earned on savings, expressed as a percentage.

When short-term bond yields exceed long-term yields, often seen as a recession warning.

The process of a private company offering its shares to the public for the first time.

When a company terminates employees, usually to cut costs or due to restructuring.

Buying a company mostly with borrowed money, using the target's own assets as collateral.

Everything a company owes to others, such as loans, bonds, or unpaid bills.

An order to buy or sell a security only at a specified price or better.

How quickly and easily an asset can be converted into cash without affecting its price.

Deals where companies combine (merger) or one company buys another (acquisition).

Buying securities with borrowed money from a broker, which amplifies both gains and losses.

The total value of a company's shares, calculated as share price times shares outstanding.

A drop of 10% or more in a market index or stock from its recent peak.

A firm that continuously buys and sells a security to provide liquidity to the market.

An order to buy or sell a security immediately at the best available current price.

The percentage of total sales in an industry captured by one company.

The lowest hourly pay an employer can legally offer workers.

A central bank's management of interest rates and money supply to control inflation and growth.

A market structure where a single company controls the entire supply of a good or service.

A loan used to purchase real estate, secured by the property itself as collateral.

The average price of an asset over a set period, used to smooth out short-term fluctuations.

A professionally managed fund pooling money from many investors to buy a diversified portfolio.

A company's total profit after all expenses, taxes, and costs have been subtracted from revenue.

The total value of what a person or company owns minus what they owe.

A unique digital token on a blockchain representing ownership of a specific item, like art or media.

A loan on which the borrower has stopped making scheduled payments.

A monthly US report showing the number of jobs added or lost, excluding farm work — closely watched by markets.

Moving a business operation to another country, usually to cut costs.

A market dominated by a small number of large companies.

Organization of the Petroleum Exporting Countries — a group of oil-producing nations that coordinates output and prices.

Operating profit divided by revenue, showing how efficiently a company runs its core business.

A contract giving the right, but not the obligation, to buy or sell an asset at a set price.

Hiring an outside company to perform a task or service instead of doing it in-house.

Share price divided by earnings per share; a common measure of how expensive a stock is.

A low-priced, small-company stock that is often highly volatile and speculative.

A significant change in a company's business strategy or product direction.

Tracks prices producers receive for goods and services, often a leading signal for consumer inflation.

Investment funds that buy and restructure private (or newly private) companies for profit.

Economic policy that restricts imports (via tariffs or quotas) to protect domestic industries.

A vote cast by a shareholder's representative, often used at annual company meetings.

A central bank policy of buying large amounts of bonds and other assets to inject money into the economy and keep interest rates low.

The reverse of QE: a central bank shrinks its balance sheet by letting bonds mature or selling them, pulling money out of the economy.

A sustained rise in prices over a short period, often after a decline.

A significant decline in economic activity, typically defined as two straight quarters of falling GDP.

A company that owns and operates income-producing real estate, allowing investors to buy shares in it.

The interest rate on short-term loans where banks trade securities with a promise to buy them back.

The minimum amount of cash banks must hold in reserve rather than lend out.

The total income a company generates from selling goods or services, before any costs are deducted.

Market mood describing whether investors are favoring riskier assets (risk-on) or safer ones (risk-off).

Net income divided by total assets, showing how efficiently a company uses its assets to generate profit.

Net income divided by shareholder equity, showing how efficiently a company uses investor capital.

The profit or loss from an investment relative to its cost, expressed as a percentage.

How long a company can keep operating before it runs out of cash, at its current burn rate.

An asset, like gold or US Treasuries, expected to hold or gain value during market turmoil.

The earliest stage of startup funding, usually used to develop an idea into a working product.

A rapid, widespread decline in the price of securities due to heavy selling.

Later startup funding rounds that follow seed funding, used to scale the business.

When a company repurchases its own shares from the market, reducing the number outstanding.

Betting a stock's price will fall by borrowing and selling shares, then buying them back cheaper.

Self-executing code on a blockchain that automatically enforces the terms of an agreement.

When a central bank slows inflation without triggering a recession.

A company's ability to meet its long-term financial obligations.

Debt issued by a national government, usually in the form of bonds.

When a company separates part of its business into a new, independent public company.

A cryptocurrency designed to hold a stable value, usually pegged to a currency like the US dollar.

A rare combination of high inflation, slow growth, and high unemployment happening together.

Extra government spending or tax cuts designed to boost a weak economy.

A work stoppage by employees to demand better pay, conditions, or benefits.

Financial support given by the government to a business or sector to lower its costs.

The network of steps and companies involved in producing and delivering a product to consumers.

Price points where an asset historically tends to stop falling (support) or stop rising (resistance).

A tax imposed by a government on imported goods, often used as a trade policy tool.

A country or jurisdiction offering very low taxes, used by companies and individuals to reduce tax bills.

Studying past price charts and volume patterns to predict future price movements.

When a country imports more goods and services than it exports.

When a country exports more goods and services than it imports.

A long-term bond issued by the US government, considered one of the safest investments.

The percentage of the labor force that is jobless and actively looking for work.

A privately held startup company valued at over $1 billion.

An estimate of what a company or asset is currently worth.

Funding provided to early-stage, high-growth-potential startups in exchange for equity.

A measure of how much and how fast an asset's price swings over time.

Current assets minus current liabilities; a measure of a company's short-term financial health.

An international institution providing loans and grants to developing countries for development projects.

The annual return an investment generates, expressed as a percentage of its price.

A chart showing bond yields across different maturities, used to gauge economic expectations.