Business Math: Financial literacy Terms Lesson 4

The total amount of money being transferred into and out of a business or individual's account.

• Cashflow

• Liability

• ROI

• Passive income

An item of property or investment owned by an individual or business that has value and can be converted into cash.

• Income

• Liability

• Asset

• Net Worth

·        A financial obligation or debt that an individual or business owes to another party.

• Risk management

• Diversification

• Capital

• Liability

·        A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single investment's performance.

• ROI

• Diversification

• Risk Management

• Liability

·        The use of borrowed capital or other financial tools to increase the potential return of an investment.

• ROI

• Liability

• Diversification

• Leverage

What does ROI stand for?

• Return on Investment

• Return of income

• Redo of investment

• Rest on internet

·        A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

• Diversification

• Leverage

• Return on investment

• Profit

·        A formal record of the financial activities and position of a business, person, or other entity, typically including balance sheets and income statements.

• Passive income

• Net Worth

• Risk Management

• Financial Statement

·        Income that requires minimal labor to earn and maintain, often derived from rental property, limited partnerships, or other enterprises in which a person is not actively involved.

• Active income

• Passive income

• Financial statement

• ROI

Leverage

• Money saved in a bank

• Money moving in and out of a business or person's account

• Using borrowed money to try to increase investment returns

• Selling all your assets