Basic Financial Concepts

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Balance sheets

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A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

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Break - Even

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The point at which total revenues equal total costs, resulting in neither profit nor loss.

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Profit & Loss

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A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time, usually a fiscal quarter or year.

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Cash flow

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The total amount of money being transferred into and out of a business, especially as affecting liquidity.

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Revenue

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The total income generated by the sale of goods or services related to the company's primary operations.

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Assets

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Resources owned by a company that have economic value and can provide future benefits.

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Liabilities

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Obligations or debts that a company owes to outside parties, which are settled over time through the transfer of economic benefits.

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Equity

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The value of the shares issued by a company, representing ownership interest held by shareholders in the company.

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Depreciation

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The reduction in the value of an asset over time, due in particular to wear and tear.

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Dividend

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A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional stock.