Financial Terms Glossary

by John Kind

Index

A

Absorption costing

Acid-test ratio

Accounts payable

Accounting standards

Accounts receivable

Accruals and accrued charges

Accruals concept

Activity based costing

Accumulated depreciation/amortisation

Amortisation

Annual report and accounts

Assets

Asset turnover

Audit

Auditors

Audit committee

Audit report

Authorised share capital

 

B

Balance sheet

Bond

Book value

Break-even point

Budget

Budgetary control

 

C

Capital employed

Capital expenditure

Capital gearing or gearing

Capitalise

Capital and reserves

Cash flow

Cash flow statement

Collection period/days sales outstanding

Consolidated or group accounts

Contingent liability

Contribution

Corporation tax

Cost

Cost centre

Cost code

Cost of capital

Cost of sales/cost of goods sold

Creditors

Credit rating

Current assets

Current liabilities

Current ratio

 

D

Debenture

Debt

Debt-to-equity ratio

Debtors

Depreciation

Discounted cash flow

Dividend

Dividend cover

Dividend yield

Double entry bookkeeping

 

E

Earnings

Earnings per share

Ebitda

Equity

Exceptional items

 

F

Factoring

FIFO

Fixed or non-current assets

Flexible budget

Floating charge

Forecast

 

G

GAAP (Generally Accepted Accounting Principles)

Gearing

Going concern

Goodwill

Gross profit and gross profit margin

Group accounts

 

H

Historical cost

Holding company

 

I

Income

Income statement

Insolvent

Intangible assets

Interest cover

Internal Rate of Return (IRR)

Inventory

Investments

J

Joint venture

 

L

Lease

Liability

LIFO

Limited company

Liquidity

Liquid resources

 

M

Margin of safety

Marginal costs and marginal costing

Market capitalisation

Minority interest

Mortgage

 

N

Net assets

Net current assets

Net present cost

Net present value

Net worth

Nominal value

 

O

Off-balance sheet financing

Operating costs

Operating margin

Operating profit

Opportunity cost

Ordinary shares

Overdraft

 

P

Payback period

Preference shares

Prepayment

Present value

Price-earnings ratio

Profit

Profit after taxation

Profit before taxation

Profit and loss account/income statement

Profitability index

Profit margin

Provision

 

R

Replacement cost

Reserves

Retained profit/earnings

Return on capital employed (ROCE)

Return on equity

Revaluation reserve

Revenue

Revenue reserve

Rights issue

 

S

Sales

Scrip issue

Sensitivity analysis

Share buy-back

Share capital

Share premium

Shareholder return

Solvency

Standard costing

Stocks

Stock turnover rate

Subsidiary company

Sunk cost

 

T

Turnover

Trade creditors

Trade debtors

Trading profit

 

V

Variable cost

Variance

 

W

Working capital

 

Z

Zero-based budget