Debt Service

Intermediate 💰 Finance / Accounting

Definition

The principal and interest payments on your loans—the amount of money preventing you from doing anything fun.

Example Usage

Our debt service obligations are $2 million annually, limiting our capital expenditure budget.

Source: Corporate finance and accounting terminology

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The bottom line after all expenses, taxes, and interest—the number that determines your bonus.

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rho

In finance, it's the Greek letter that measures how sensitive an option's value is to changes in interest rates—because apparently regular English words weren't confusing enough for derivatives traders. One of 'The Greeks' that options traders throw around to sound sophisticated at cocktail parties. Spoiler alert: most people just nod and pretend to understand.

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distressed

In finance, assets or companies in serious financial trouble, teetering on the edge of bankruptcy or default—basically the business equivalent of a fire sale. Distressed debt trades at steep discounts because there's a real chance investors will lose everything, attracting vulture funds who specialize in profiting from others' misery. Also describes furniture made to look old on purpose, but that's significantly less financially devastating.

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GAAP

Generally Accepted Accounting Principles—the rulebook for how to count money in the United States, though it somehow still permits creative interpretation.

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COGS (Cost of Goods Sold)

Direct costs of producing goods you sell—labor, materials, and the despair of manufacturing.

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hebetude

A state of mental dullness or lethargy; lack of liveliness, energy, or alertness....