Numbers dressed up in fancy suits pretending to be words.
Interest earning interest on itself, which Einstein allegedly called the eighth wonder of the world, though he probably never had a credit card balance. It's magical when it works for you and absolutely devastating when it works against you.
Money spent on big-ticket items that a company will use for years, like equipment, buildings, or that espresso machine in the CEO's office. Accountants love CapEx because they get to depreciate it over time, which is basically financial foreplay.
The movement of money in and out of a business, which in most startups flows primarily in the out direction at an alarming velocity. Positive cash flow means more money coming in than going out, a concept that seems simple until you try to actually achieve it.
Digital money that exists solely on computers, consumes more electricity than some countries, and can lose 40% of its value because a billionaire tweeted a dog meme. It was invented to replace traditional banking and has instead created an entirely new way to lose your life savings.
Money, equipment, or assets used to generate more wealth—essentially the financial fuel that makes the economic engine go vroom. In finance, it's the cash you invest; in economics, it's one of the holy trinity of production factors alongside labor and land. Venture capitalists have lots of it, and startups are perpetually hunting for it like caffeinated treasure hunters.
In finance, a security that's having an identity crisis—it starts as one thing (usually a bond) but can transform into something else (usually stock) like a financial Transformer. Investors love them because they get the safety of debt with the upside potential of equity. It's also a car with a roof that comes off, but that's significantly less exciting to accountants.
Transactions between related entities in different countries, creating a transfer pricing nightmare and tax optimization opportunity. It's where legitimate business meets aggressive tax planning, separated by a very fine line.
Short-term unsecured promissory notes issued by corporations to fund immediate needs, typically maturing in under 270 days to avoid SEC registration. Think of it as corporate IOUs for companies with good enough credit that people actually accept them.
Borrowing money in a currency with low interest rates, then investing it in assets with higher returns elsewhere, pocketing the difference. Works brilliantly until exchange rates move against you and your 'free money' becomes very expensive.
Reserves that companies stash away during good times to smooth out earnings during bad quarters, like a financial rainy day fund that violates accounting principles. It's earnings management dressed up in respectable terminology.
The practice of attaching specific conditions or requirements to financial assistance, loans, or agreements, most notably used by international financial institutions. It's the global economic version of "you can have dessert after you eat your vegetables," except the vegetables are structural reforms and the dessert is billions in credit. The IMF's favorite way to ensure countries follow through on promises.
A structured security backed by a pool of leveraged loans, sliced into tranches with varying risk levels. Like a financial layer cake where the top tier is reasonably safe and the bottom is essentially a gamble on corporate junk.
A trader who believes that staring at price charts and drawing lines on graphs can predict the future, also known as a technical analyst. They're basically financial astrologers with better software.
A contractual clause allowing a company to demand return of previously paid compensation, typically when executives are caught cooking the books or performance metrics turn out to be fiction. It's the corporate equivalent of 'give me back my money.'
Short for cryptocurrency, the digital money that exists entirely in the cloud and whose value fluctuates more wildly than your mood on a Monday morning. It's either the future of finance or the world's most elaborate Ponzi scheme, depending on whether you bought Bitcoin at $100 or $60,000. Also refers to cryptography, the actual useful technology that crypto enthusiasts sometimes remember exists.
The time between paying suppliers and collecting from customers, measured in days. Negative is magical—you get paid before paying bills, turning working capital into a profit center. Positive means you're funding your customers' purchases with your own money.
Current assets divided by current liabilities, measuring whether you can pay short-term bills with short-term assets. A ratio above 1.0 suggests solvency; below suggests you should probably start returning the recruiters' calls.
A potential obligation that may or may not materialize depending on future events, like pending lawsuits or product warranty claims. It's Schrödinger's debt—simultaneously owing money and not owing money.
A comprehensive listing of all accounts in an organization's general ledger, organized into categories like assets, liabilities, and expenses. It's the financial filing system that makes sense to exactly one person: whoever designed it.
The direct costs of producing goods or services that were actually sold, abbreviated as COGS. It includes materials and labor but not the CEO's golf club membership, no matter how insistently he argues it's 'client development.'
The stuff you promise to forfeit if you can't pay back a loan—basically insurance for lenders who don't trust your word alone. It's the financial equivalent of leaving your driver's license at the bowling alley when you rent shoes. Can be your house, car, or collection of vintage Beanie Babies (though banks prefer the first two).
Selectively choosing favorable data points while ignoring unfavorable ones, or choosing which trades to allocate to which accounts after seeing results. It's the art of making anything look good through strategic omission.
A provision requiring executives to return compensation if certain conditions aren't met or if it was based on fraudulent numbers. It's the corporate version of 'give that back right now.'
An account that offsets another account on the balance sheet, like accumulated depreciation playing bad cop to your asset's good cop. It reduces the value of the related account without actually touching it.