DECA Business Admin Core: Financial Analysis Terms

Accounting

The systematic and comprehensive recording of financial records.

Asset

Items of value that a business possesses.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders equity at a specific point in time.

Bank Statement

Report released (on a fixed date every month) by banks that lists deposits, withdrawals, checks paid, interest earned, and service charges or penalties incurred on an account. It shows the cumulative effect of these transactions the account's balance, up to the date the report was prepared.

Budget

Estimate of costs, revenues, and resources over a specified period for a particular project or operation of a business (or household). It serves as a plan for action for achieving goals, a standard for measuring performance, and a device of coping with foreseeable adverse situations.

Cash Flow Statement

Summary of the actual or anticipated incoming and outgoing cash in a firm over an accounting period. It answers the questions "Where the money came from?" and "Where it went?" It assesses the amount, timing, and predictability of cash-inflows and cash-outflows, and are used as the basis for budgeting and business planning.

Credit

The granting of a loan and the creation of debt. It is any form of deferred payment.

Credit History

Record of a borrower's payment behavior that reflects his or her ability to repay a loan. It is a critical factor used in a credit rating, and it is used by lending institutions as a qualifier for new loans.

Currency

Tokens used as money in a country. In addition to the metal coins and paper bank notes, it also includes checks drawn on bank accounts, money orders, travelers checks, and will soon include electronic money or digital cash.

Finance

The management, creation and study of money, banking, credit, investments, assets and liabilities.

Financial Records

Formal documents representing the transactions of a business, individual or other organization. Typical documents include a statement of retained earnings and cash flow, income statements and the company's balance sheet and tax returns.

Identity Theft

A form of fraud in which someone pretends to be someone else.

Income

Payment received from work, interest earned, money from rentals, money from farm sales or profit from any type of business.

Income Statement

Summary of the profitability of a business organization over a certain period. It itemizes the revenues and expenses that led to the current profit or loss.

Income Tax

Tax paid on one's personal income.

Investment

The commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument.

Liabilities

Third party claims to the assets of a business.

Pay Stub

A document given to an employee at the end of a pay period that gives a breakdown of the gross amount of money made, the amount of money received, deductions, and any other relevant information.

Risk Management

Policies, procedures, and practices involved in identification, analysis, assessment, control, avoidance, minimization, and elimination of unacceptable risks.

Time Value of Money

The value of money figuring in an amount of interest of a specified period of time. The idea is that a dollar is worth more now because it can begin to accrue interest sooner than a dollar received at a later date.