Financial Vocabulary

#101

Balance sheet

Example sentences

1. The balance sheet lists the company's assets and liabilities.
2. The bank reviewed the balance sheet before lending money.
3. The balance sheet was prepared at the end of the year.

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#102

Income statement

Example sentences

1. The income statement shows revenue and expenses.
2. Investors read the income statement to check profit.
3. The company published its income statement yesterday.

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#103

Cash flow statement

Example sentences

1. The cash flow statement shows where cash came from.
2. The manager used the cash flow statement to plan payments.
3. The cash flow statement has operating, investing, and financing sections.

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#104

Statement of shareholders' equity

Example sentences

1. The statement of shareholders' equity explains changes in owners' value.
2. The company added retained earnings to the statement of shareholders' equity.
3. Investors reviewed the statement of shareholders' equity.

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#105

Current asset

Example sentences

1. Cash is a current asset for the company.
2. A current asset is expected to be used within one year.
3. Inventory appears as a current asset on the balance sheet.

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#106

Non-current asset

Example sentences

1. The factory is a non-current asset.
2. A non-current asset supports the business for many years.
3. The company bought a new non-current asset.

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#107

Current liability

Example sentences

1. A bill due next month is a current liability.
2. The company paid a current liability to its supplier.
3. A current liability must usually be paid within one year.

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#108

Non-current liability

Example sentences

1. The ten-year bank loan is a non-current liability.
2. A non-current liability is not due within the next year.
3. The company reduced its non-current liability.

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#109

Shareholders' equity

Example sentences

1. Shareholders' equity increased after the company earned a profit.
2. The balance sheet shows shareholders' equity.
3. Shareholders' equity is the owners' part of the business.

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#110

Retained earnings

Example sentences

1. The company used retained earnings to open a new store.
2. Retained earnings are profits kept in the business.
3. A loss reduced the company's retained earnings.

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#111

Working capital

Example sentences

1. The shop needs enough working capital to buy supplies.
2. Working capital improved after customers paid their bills.
3. The manager checks working capital every month.

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#112

Gross profit

Example sentences

1. Gross profit increased because sales rose.
2. The company calculated gross profit after product costs.
3. Higher material costs reduced gross profit.

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#113

Operating income

Example sentences

1. The business reported positive operating income.
2. Operating income improved after rent costs fell.
3. Investors compare operating income from year to year.

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#114

Earnings before interest and taxes

Example sentences

1. Earnings before interest and taxes rose by 10%.
2. The analyst used earnings before interest and taxes to compare companies.
3. Strong sales improved earnings before interest and taxes.

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#115

Earnings before interest, taxes, depreciation, and amortization

Example sentences

1. The company reported higher earnings before interest, taxes, depreciation, and amortization.
2. Investors use earnings before interest, taxes, depreciation, and amortization to study operations.
3. The loan agreement set a target for earnings before interest, taxes, depreciation, and amortization.

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#116

Net profit

Example sentences

1. The store earned a net profit of $20,000.
2. Net profit remained after all costs and taxes.
3. Lower expenses helped increase net profit.

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#117

Gross margin

Example sentences

1. The company's gross margin improved this year.
2. A higher gross margin means more sales money remains after product costs.
3. The manager compared gross margin across products.

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#118

Operating margin

Example sentences

1. The operating margin fell because rent increased.
2. Investors use operating margin to study business performance.
3. The company wants to improve its operating margin.

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#119

Net profit margin

Example sentences

1. The shop has a net profit margin of 8%.
2. A higher net profit margin can show better cost control.
3. The analyst compared the net profit margin with competitors.

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#120

Free cash flow

Example sentences

1. The company used free cash flow to repay debt.
2. Free cash flow increased after equipment spending fell.
3. Investors watch free cash flow closely.

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