Numbers dressed up in fancy suits pretending to be words.
Resources, inventory, or funds deliberately kept back for future emergencies, strategic opportunities, or that inevitable moment when everything goes sideways. In business, it's the financial equivalent of keeping a spare tire in your trunk—boring until you desperately need it. Banks love reserves; accountants worship them; entrepreneurs pretend they have them.
The adult version of 'just in case,' where you pay someone monthly to maybe help you later when disaster strikes. It's essentially a bet where you're hoping to lose: you give them money, and if nothing bad happens, they keep it and everyone's happy. The entire industry runs on actuarial tables, fine print, and the mathematical certainty that most people will pay more than they'll ever claim.
In finance, it's the magical number you get when dividing a company's stock price by its earnings—the higher the multiple, the more investors believe in fairy tales about future growth. Also known as the P/E ratio, it tells you how many years of current profits you're paying for today. Basically, it's the market's way of saying 'trust me bro' with numbers.
Money that flies out of your wallet or company coffers, usually faster than you can track it, for goods, services, or operational necessities. In business, these are the costs of keeping the lights on and the wheels turning. In legal contexts, it's often what you're trying to recover after someone else's mistake cost you dearly.
The financial alchemy of bundling loans or receivables together and selling them as securities to investors, because apparently individual mortgages aren't exciting enough. It's how banks turn illiquid assets into tradeable products, which worked brilliantly until 2008 when everyone realized some of those bundles were basically garbage wrapped in AAA ratings. Still practiced today, but with slightly more supervision.
The total value of a leveraged position's assets, as opposed to the actual cash you put up, which is usually much less. It's the difference between owning a $100,000 house and the $20,000 you put down.
The assumption that a company will continue operating for the foreseeable future rather than liquidating, which underpins how financial statements are prepared. When auditors question this assumption, update your résumé.
The numbers-heavy documents that reveal whether a company is actually making money or just really good at spending investor cash. It's the collective term for financial statements like balance sheets, income statements, and cash flow reports that accountants love and everyone else pretends to understand. Essentially, it's where the truth about a business's health lives, buried under Generally Accepted Accounting Principles.
The entity that gives you money now in exchange for you giving them more money later, ideally with interest and your sanity intact. Banks, credit unions, and that one friend who still brings up the $20 from 2015 all qualify.
A recorded transaction in the accounting system showing debits and credits that must balance. Each entry tells a tiny story of money moving, though reading them is only slightly more entertaining than watching paint dry.
A loan where the lender can come after your other assets if the collateral isn't enough to cover the debt—the financial equivalent of co-signing for your irresponsible cousin. Sleep tight!
The minimum cushion of high-quality capital that banks must maintain relative to their risk-weighted assets, determined by regulators who learned that 'trust us' isn't adequate oversight. Your taxpayer-funded insurance against banker recklessness.
The price at which an asset would trade in an orderly transaction between willing parties, a theoretical concept that accountants somehow need to calculate. It's what something should be worth in an imaginary perfect market.
Deferred acquisition payments contingent on the target company hitting future performance metrics, bridging valuation gaps between optimistic sellers and skeptical buyers. It's 'prove it and we'll pay more.'
Financial contracts obligating parties to buy or sell assets at predetermined future dates and prices, essentially allowing traders to bet on tomorrow's commodity prices today. These derivatives let farmers hedge against price drops and speculators gamble on market movements without ever touching an actual bushel of wheat. The futures market adds liquidity and price discovery to markets while giving financial news anchors something to dramatically discuss at market close.
A fancy IOU from a corporation that's basically backed by nothing more than a firm handshake and the company's stellar reputation. Unlike bonds secured by actual assets, debentures rely solely on the issuer's creditworthiness—think of it as lending money to your successful friend who promises they're good for it, except your friend is a Fortune 500 company. If they go belly-up, you're just another creditor in a very long line.
An accounting treatment that matches the timing of gains and losses on hedging instruments with the hedged items, preventing volatility from making your financials look bipolar. IFRS 9 and ASC 815's way of acknowledging that risk management shouldn't tank your earnings.
Money extracted by the government in exchange for services you'll never see itemized on a receipt. Unlike paying for a latte, you don't get to choose the size, flavor, or whether you want it at all. The financial relationship status between you and your government: it's complicated, and it's definitely not negotiable.
The mythical unicorn of financial transactions: money that the government has graciously decided not to touch. Income or purchases that escape taxation, usually because lawmakers needed to incentivize something or felt charitable that particular legislative session. The two most beautiful words in accounting, often followed by fine print and eligibility requirements.
A binding commitment that transforms 'I'd like to' into 'I legally have to' faster than you can say 'terms and conditions.' It's the formal requirement—legal, moral, or contractual—that keeps society functioning and accountants employed. The thing that makes you show up even when you'd rather fake your own death.
To claim something exclusively as your own or to officially set funds/resources aside for a specific purpose—basically 'calling dibs' with legal authority.
To cordially tell money 'you stay here and don't associate with those other rowdy funds.' A legal barrier ensuring specific funds can only be used for their designated purpose, protecting them from predatory creditors or budget cuts.
Faker than a three-dollar bill, more artificial than a participation trophy. Something that looks legit but is actually counterfeit, fraudulent, or just plain wrong.
Temporarily acquiring someone else's money with a solemn promise to give it back (eventually, maybe). Banks love it because interest exists.