finance

Asset

Resource owned with economic value to generate revenue.

Asset Allocation

Division of portfolios across assets to balance risks and rewards.

Balance Sheet

Statement showing a company's financial position at a point in time.

Bear market

Market decline of at least 20% from a recent high.

Blue chip stock

Shares of stable, established companies with lower risk.

Bonds

Debt instruments paying periodic interest to raise capital.

Brand Loyalty

Consumer commitment to keep using a specific brand.

Brokerage

Intermediary between buyers and sellers in transactions.

Bull market

Period of rising market prices supported by economic growth.

Buyback

Company purchasing its outstanding stock to reduce market shares.

Capital Assets

Long-term assets used by a firm to generate income.

Cold-calling

Unsolicited phone calls to potential customers to sell goods.

Commodities

Interchangeable basic goods or raw materials.

Common stock

Shares granting voting rights and potential dividends.

Compromise

Agreement where both parties concede part of their demands.

Confusion Marketing

Selling complex bundles to hinder price comparisons.

Correction

Security or market price decline of 10% to 20% from its peak.

Current Assets

Short-term assets convertible to cash within a year.

Current Liabilities

Short-term debts due within one year.

Cyclical Stock

Stock tied to and fluctuating with the economic cycle.

Defensive stock

Stock with stable earnings regardless of market state.

Depreciation

Systematic allocation of a tangible asset's cost over its life.

Diversification

Risk management strategy mixing portfolio investments.

Dividend / Dividends

Distribution of a portion of company earnings to shareholders.

Dividend Yield

Annual payout relative to stock price.

Dollar cost averaging

Periodic asset purchases to reduce market volatility impact.

Earnings Miss

Quarterly earnings falling below analyst forecasts.

Earnings Per Share (EPS)

Profit portion allocated to each common share.

Economics

Study of how resources are allocated to meet choices.

Enterprise value

Total company value including market cap, debt, and cash.

Entrepreneurship

Managing a business while taking financial risks for profit.

First Refusal

Right to match an offer before product/property goes to others.

Fiscal policy

Government taxation and spending to influence macro conditions.

Fixed Assets

Tangible long-term operational property hard to convert to cash.

Fixed Income Markets

Revenue from trading debt instruments like bonds.

Fund

Capital pool collected from investors to buy securities.

Gross margin

Net sales minus COGS, expressed as a percentage.

Hammer out a deal

Negotiating intensely until reaching a formal agreement.

Hard Sell

Aggressive sales approach for immediate transactions.

Hedge fund

Investment fund using diverse, non-traditional strategies.

Incentive

Motivation for a specific action or behavior.

Income Statement

Statement of revenues, expenses, and net profit or loss.

Inertia Selling

Providing unrequested goods and demanding payment.

Insider

Person with access to non-public material company info.

Inventory

Goods held for resale or production.

Liability

Financial debts or legal obligations owed.

Liquidity

Ease of converting an asset to cash without price effect.

Loss Leader

Product sold at a loss to attract customers to other items.

Lucrative

Producing high profit or financial gain.

Lump sum investing

Investing a large single sum all at once.

Macroeconomics

Study of large-scale economic factors like inflation and GDP.

Market Capitalization

Total market value of a company's outstanding shares.

Merging

Combining two existing companies into one entity.

Microeconomics

Study of individual decision-making units.

Monetary policy

Central bank actions to manage money supply and growth.

Net Income

Final profit after deducting all expenses and taxes.

Niche Market

Focused market segment for specific product requirements.

On Approval

Goods delivered with right to evaluate and return without obligation.

Opening Price

First trade price of a security upon exchange opening.

Operating margin

Percentage of revenue left after operational expenses.

Opportunity Cost

Loss of potential gain from forgone alternatives.

Peg ratio

P/E ratio divided by earnings growth rate.

Penny stock

Low-priced, speculative stock of a small public company.

Portfolio

Collection of financial investments held by an investor.

Preferred stock

Ownership class with higher claim on assets and fixed dividends.

Profitability Margins

Metrics assessing ability to generate earnings relative to revenue/assets.

Rally

Period of sustained price increases for securities.

Red Tape

Excessive bureaucracy and administrative rules.

Revenue

Total income from sales before deducting expenses.

Roth IRA

Retirement account allowing tax-free growth and withdrawals.

Scarcity

Economic problem of unlimited wants versus limited resources.

Shareholder

Legal owner of shares in a corporation.

Shareholders' Equity

Residual interest in assets after deducting liabilities.

Sharpe ratio

Measure of risk-adjusted return compared to a risk-free asset.

Shopping Around

Comparing prices and conditions across providers before buying.

Speculation / Speculative

High-risk financial transactions or assets expected to gain value.

Stagflation

Economic slow growth and high unemployment with inflation.

Stock

Security signifying fractional corporate ownership.

Stock Exchange

Marketplace where financial securities are bought and sold.

Swallowed Up

Being acquired completely by a larger corporation.

Telesales / Telemarketing

Direct selling of products over the phone.

Ticker Symbol

Characters representing a security listed on an exchange.

Trading Volume

Total shares or contracts traded during a period.

Under the Hammer

Being sold at an auction to the highest bidder.

Volatilities

Statistical measure of return dispersion over time.