Numbers dressed up in fancy suits pretending to be words.
Moving an unused deduction or credit from one tax year to the next year or future years. It's the tax world's way of softening blows from bad years by letting you use them later.
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.
When someone takes excessive risks because they're protected from consequences (someone else bears the loss). The reason banks took insane leverage in 2008.
Deliberately manipulating financial records to misrepresent a company's actual performance. Also known as 'creative accounting' when it's not quite criminal.
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.
An actual paper dollar bill as opposed to its coin-form equivalent (quarters, dimes, etc.)—useful when someone specifically needs the whole unit and not loose change.
The risk-absorbing professional who evaluates insurance policies and securities offerings, essentially betting the company's capital that catastrophe won't strike their clients anytime soon.
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 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.
A company kept alive by continuous financing despite being unprofitable and unlikely to ever make money. Financial walking dead.
A manipulation scheme where fraudsters artificially inflate a stock's price (pump) then sell their shares (dump) to unsuspecting buyers. Profitable for liars.
A financial derivative that lets pessimists get paid for being right—the option to sell something at a guaranteed price whether the market likes it or not. The insurance policy for people who saw the crash coming. Example: She bought puts on the stock to hedge her investment portfolio.
Money in tangible form that doesn't require a banking app, passwords, or digital footprints—the preferred payment method of people doing things they'd rather not explain to auditors. Useful for those who remember what actual currency feels like.
An asset you can't touch or see—patents, trademarks, copyrights, brand value. They're valuable but impossible to calculate precisely, which makes them accountants' favorite source of creative interpretation.
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.
The percentage of revenue remaining after expenses; gross margin (before OpEx), operating margin (after OpEx), and net margin (after everything). The more the better.
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 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.'
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.
To send money (usually begrudgingly) to pay a debt or obligation. The financial equivalent of admitting defeat while simultaneously proving you're solvent.
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.
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.
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.