Numbers dressed up in fancy suits pretending to be words.
A person or business so financially submerged that accountants gave up and lawyers got involved. The point where 'broke' becomes a court-acknowledged legal catastrophe requiring formal government intervention.
Long-term assets like buildings, equipment, and vehicles that aren't meant to be sold as part of normal operations. They're on the balance sheet for years and gradually depreciated as they slowly become worthless.
An economic approach explaining human behavior through incentives and financial motivation, often yielding counterintuitive or controversial conclusions. The book that convinced millions that everything—even honor and morality—eventually comes down to money.
When someone takes excessive risks because they're protected from consequences (someone else bears the loss). The reason banks took insane leverage in 2008.
A change in an asset's recorded value to reflect what the market currently thinks it's worth. Sometimes this is realistic; sometimes it's a company admitting it made a terrible investment.
The money returned to your account when a product disappoints you as much as that software project that promised to 'synergize stakeholder value.' The miraculous process of giving money back.
In legal and financial contexts, the person courts appoint to manage assets (often because the owner proved spectacularly incompetent). Basically, a financial babysitter with legal authority over your mess.
The difference between a company's book balance and actual bank balance due to checks written but not yet cleared. Temporary money that doesn't belong to you but you can use anyway.
Deliberately manipulating financial records to misrepresent a company's actual performance. Also known as 'creative accounting' when it's not quite criminal.
Trading ahead of client orders by using insider knowledge of pending transactions; highly illegal and incredibly profitable if caught slowly.
A manipulation scheme where fraudsters artificially inflate a stock's price (pump) then sell their shares (dump) to unsuspecting buyers. Profitable for liars.
The percentage of revenue remaining after expenses; gross margin (before OpEx), operating margin (after OpEx), and net margin (after everything). The more the better.
An independent examination of financial statements to verify they're accurate and follow accounting standards. It's the financial equivalent of a teacher grading a student's homework—usually they find mistakes.
A daily allowance paid to employees for travel expenses, supposed to cover meals and incidentals. It's the company's way of saying 'eat cheap so we save money.'
Cash in transit between accounts or between a company and its bank, where it technically belongs to neither for a brief period. The financial phenomenon accountants use to explain why the bank and the company's records disagree.
How many times a company sells and replaces its inventory during a period. High turnover is usually good (products sell fast), unless it's so high that you're constantly out of stock.
The accounting system where every transaction affects at least two accounts (a debit and a credit), ensuring the fundamental accounting equation always balances. It's elegant, logical, and has been fooling people for 600 years.
Unusual, infrequent events that significantly impact financial results—like selling off a division or natural disaster losses. Companies use this to claim profits look better than they actually are.
When an asset's value drops permanently, you must write it down on the books. It's accounting's way of admitting you bought something that's now worthless, usually after several years of pretending it wasn't.
A measure of how much debt a company uses relative to its equity, showing financial risk. High leverage means lots of debt; low leverage means the company paid with its own money and didn't maximize returns.