Words Used In Corporate Finance

Understanding the language of finance.

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Take a quick look at the financial pages of any major newspaper. You'll see all sorts of terms and phrases that have a very specific meaning to those who work in the world of corporate finance. For others, however, these terms can seem confusing – or even intimidating!

This Mind Tools "Words" page is designed to help you navigate your way through the language of finance. We provide a quick-reference glossary of many words and phrases commonly used when discussing publicly traded companies.

This "Words" page covers the following terms:

Financial Analysis Terms

• Acid-test ratio/quick ratio
• Break-even (BE)
• Cost accounting
• Current ratio
• Gearing ratio/financial leverage
• Insolvent
• Management accounting
• Net present value (NPV)
• Opportunity cost
• Present value (PV)
• Ratio analysis
• Return on investment (ROI)
• Zero-based budgeting (ZBB)

General Corporate Finance Terms

• Bond
• Common stock
• Debt financing
• Dividends
• Equity financing
• GAAP (generally accepted accounting principles/practices)
• IPO (initial public offering)
• Mergers and acquisitions (M&A)
• P/E (price to earnings) ratio
• Preferred stock
• Retained earnings
• Yield

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