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Terms Dictionary

Accounting

12 definitions in this topic

Accounts Payable

Money a company owes its suppliers for goods and services already received but not yet paid for.

Amortization

The gradual write-down of an intangible asset, or the schedule by which a loan's principal is repaid over time.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time. It follows the accounting equation: Assets = Liabilities + Equity.

Book Value

The accounting value of a company's assets minus its liabilities, sometimes expressed per share.

Cash Flow Statement

A financial statement tracking cash moving through operating, investing, and financing activities during a period.

Earnings Per Share (EPS)

A company's profit divided by the number of outstanding common shares. It is a key indicator of corporate profitability.

EBITDA

Earnings before interest, taxes, depreciation, and amortisation a rough proxy for operating cash generation.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting. It may or may not align with the calendar year.

Free Cash Flow (FCF)

The cash a company generates after accounting for cash outflows to support operations and maintain capital assets. It is a strong indicator of financial health.

Goodwill

The premium above fair value of net assets paid in an acquisition, carried on the balance sheet as an intangible.

Quick Ratio

Liquid assets divided by current liabilities, a strict test of a company's short-term solvency.

Working Capital

Current assets minus current liabilities, the cushion funding day-to-day operations.