Essential Financial and Business Terminology

Essential Financial and Business Vocabulary

Market Trends and Movements

• Go up: Goes through the roof, rally, stage a comeback.
• Go down: Slide, tumble, drop.
• Synonyms: Drop = went down; Rise = grow; Plunge = drop; Stock = shares = equity; Profit = income = markup = earnings.

Corporate and Financial Terms

• Fine: A monetary penalty for breaking the law.
• Conglomerates: A firm engaged in two or more unrelated businesses.
• Underwriting: The act of undertaking to purchase at an agreed price any unsold portion of a public issue of shares.
• Depositors: A person or entity that deposits money in a bank.
• Merger: A decision by two companies to combine all operations, officers, structure, and functions.
• Takeover: When a company gains control of another by buying its stocks.
• Mortgage: A loan used to purchase real estate or property.
• Capital: Money invested in a firm.
• Loan: The extension of money from one party to another with the agreement that it will be repaid.
• Issue: To offer securities for sale to financial institutions and the public.
• Cash Outflow: Money paid out by an organization as a result of operating, investment, or financing activities.
• Cash Flow: Money generated by a company through sales, financing, or investments.
• Net Working Capital: The aggregate amount of all current assets and current liabilities.
• Capital Budgeting: The process in which a business determines and evaluates potential large-scale expenses or investments.

Key Financial Concepts

1. Bankruptcy: Legal status of insolvency and plant closures.
2. Bears: Investors who expect commodity market prices to rise in the very short term.
3. Institutional Investors: Large entities that manage money and often seek to profit by selling shares and commodities.
4. Shares: Units of ownership in a corporation.
5. Collateral: An asset (like a car) pledged to secure a loan in case of default.
6. Economic Bubble: A period of inflated asset prices that may lead to a market crash.
7. Raise Capital: The process of securing funding for a new business venture.
8. Day Traders: Investors who attempt to lock in quick profits by buying and selling within the same day.

Global Stock Market Indices

• Chile: IPSA
• Brazil: Bovespa
• Argentina: Merval
• USA: Dow Jones, Nasdaq 100, S&P 500
• Japan (Tokyo): Nikkei 225
• Mexico: IPC
• UK: FTSE 100
• Germany: DAX
• Paris: CAC 40
• Hong Kong: Hang Seng
• Moscow: MICEX
• Singapore: Straits Times Index
• Peru: SRP Peru
• Russia: Nadex
• Malaysia: FTSE KLCI

Accounting Classifications

• Assets: Machines, cash, buildings, vehicles, furniture, equipment, patents, and land.
• Liabilities: Notes payable, inventory, and loans.