Balance Sheet - A financial statement that provides a snapshot of a company's financial health at a specific point in time. It shows what the company owns (assets), what it owes (liabilities), and the remaining ownership stake (equity). Imagine it as a picture of your wallet at a specific moment, showing how much cash you have, what you owe on your credit card, and the total value of everything in your wallet., Assets - Resources with economic value owned by a person or company. These can be tangible (like cash, property, inventory) or intangible (like patents, copyrights)., Liquidity - The ease with which an asset can be converted into cash without a significant loss in value. Cash is the most liquid asset, while real estate is less liquid., Generally Accepted Accounting Principles(GAAP) - A set of accounting standards that companies must follow when preparing financial statements. Think of it as the rulebook for financial reporting, ensuring consistency and transparency., Capital Gains - The profit made from selling an asset for more than its purchase price. Imagine buying a stock for $10 and selling it for $15, the $5 profit is your capital gain., Net Income - The profit a company earns after all expenses have been paid. It's essentially the company's bottom line., Equity - The ownership interest in a company represented by common stock and retained earnings. It's essentially what's left after liabilities are subtracted from assets., Depreciation - The allocation of the cost of an asset over its useful life. As you use a car, it depreciates in value., Earnings Per Share(EPS) - A company's net income divided by the number of outstanding shares of common stock. It reflects the portion of profit allocated to each share., Net Worth - The total value of your assets minus your liabilities. It's a measure of your overall financial well-being., Amortization - Similar to depreciation, but used for intangible assets like patents or copyrights, which have a limited useful life., Capital Market - A financial market where long-term securities like stocks and bonds are traded., Profit Margin - A profitability metric that shows what percentage of revenue is left as profit after accounting for costs., Earnings Before Interest Taxes, Depreciation and Amortization(EBITDA) - A financial metric used to assess a company's operating performance without the influence of financing decisions or accounting practices., FICO Score - A three-digit number that represents a person's creditworthiness, used by lenders to determine loan eligibility and interest rates., Stock Options - Contracts that give the holder the right, but not the obligation, to buy or sell a stock at a certain price by a certain time., Bonds - IOUs issued by companies or governments, promising to repay a certain amount of money with interest by a maturity date., Stock - Shares of ownership in a company. When you buy stock, you become a part-owner of the company., Cash Equivalents - Highly liquid assets that can be readily converted to cash, like short-term money market instruments or certificates of deposit., Income Statements - Financial statements that summarize a company's revenue, expenses, and net income over a specific period., Return on Investment(ROI) - A performance measure used to evaluate the efficiency of an investment or compare different investments., Cash Flow - The movement of cash in and out of a business or person over a specific period. It considers both incoming cash from sales, investments, or loans, and outgoing cash for expenses, debt payments, or investments. Imagine it as the flow of water in and out of a container. A positive cash flow means more money is coming in than going out, while a negative cash flow indicates the opposite., Compound Interest - "Interest on interest." It's the growth of your money over time when the interest earned is added to the principal amount and also earns interest in subsequent periods. The longer your money is invested and the more frequently interest is compounded, the greater the overall growth., Valuation - The process of determining the fair market value of an asset. This could be a company, a piece of real estate, a stock, or any other item that can be bought or sold. Valuation considers various factors like market conditions, income generation potential, and replacement cost., Liabilities - The financial obligations a person or company owes to others. These can be short-term debts like credit card balances or long-term debts like mortgages. Liabilities are essentially what you owe, and they are reflected on the balance sheet of a company., Working Capital - A measure of a company's short-term financial health. It's calculated by subtracting current liabilities (debts due within a year) from current assets (resources that can be converted to cash within a year). Positive working capital indicates a company has enough resources to cover its short-term obligations, while negative working capital might suggest potential cash flow problems., Life Insurance - A type of life insurance that provides a death benefit to the beneficiary if the insured person dies within a specific period (the term). It's generally less expensive than whole life insurance because it doesn't have a cash value component. Term life insurance is helpful for providing financial security to loved ones in case of your passing within the coverage period.,

FINANCES- B2+

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