Finance Glossary

A financial report summarising revenue, costs, and profit over a specific period.

A snapshot of a company's assets, liabilities, and equity at a specific point in time.

A report showing how cash moves in and out of a business across operating, investing, and financing activities.

A listing of all general ledger account balances used to verify that debits equal credits.

The master record of all financial transactions in a business, organised by account.

Another name for the Profit & Loss Statement — a report of revenue, expenses, and profit over a period.

A report showing how shareholders' equity changed during a period through profit, dividends, and capital movements.

A valuation method that estimates the present value of a business based on its projected future cash flows.

Earnings Before Interest, Taxes, Depreciation, and Amortization — a measure of operating profitability.

The difference between the present value of cash inflows and outflows — used to evaluate investment decisions.

The discount rate at which the NPV of an investment equals zero — representing its expected annualised return.

The blended cost of a company's debt and equity financing, used as the discount rate in valuations.

The total value of a business including equity and debt, minus cash — used in M&A and valuation multiples.

The percentage of revenue remaining after subtracting cost of goods sold — a measure of pricing power.

The percentage of revenue that becomes profit after all expenses, taxes, and interest are paid.

Current assets minus current liabilities — a measure of short-term liquidity and operational efficiency.

Current assets divided by current liabilities — a quick test of short-term debt coverage.

Total debt divided by total equity — a measure of financial leverage and risk.

The rate at which a company spends cash each month — critical for startups tracking their runway.

The number of months a company can continue operating at its current burn rate before running out of cash.

The global accounting framework used in 140+ countries for preparing financial statements.

The simplified accounting framework for private companies in Malaysia, based on IFRS for SMEs.

The US accounting framework governing how financial statements are prepared and reported.

A chronological record of all changes and transactions that allows tracing any figure back to its source.

The process of matching two sets of records to ensure they agree — a critical month-end control.

A part-time, outsourced Chief Financial Officer who provides strategic finance leadership without full-time cost.

The process of finalising all financial transactions for a month and producing accurate financial statements.

Money a company owes to suppliers and vendors — a current liability on the balance sheet.

Money owed to a company by its customers — a current asset that directly affects cash flow.

The system of policies, processes, and tools for controlling, tracking, and reporting business expenditures.

Comparing planned spending and revenue against actual results to identify variances and their causes.

Combining financial statements from multiple entities into a single group-level report.

The regular financial and operational reports prepared for a company's board of directors.

The accounting rules for when and how revenue is recorded in the financial statements.

Two methods for recording transactions — accrual recognises when earned/incurred, cash when money moves.

The systematic allocation of a tangible asset's cost over its useful life.

The gradual write-off of an intangible asset's cost, or the scheduled repayment of a loan principal.

Spending on long-term assets like equipment, property, or technology that benefits the business over multiple years.

Day-to-day expenses required to run the business — salaries, rent, utilities, marketing.

Calculating the point at which total revenue equals total costs — no profit, no loss.