It All Starts With The Financials - Vocabulary & Key Terms

A formal record of a company's financial activities, often released annually and quarterly. Financial reports are crucial for investors to evaluate a company's performance. What is this called?

• Financial Report

• Balance Sheet

• Invoice

• Tax Return

An annual report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive overview of a company's financial health. It is the most detailed public record for investors. What is this report called?

• 10-K

• 10-Q

• 8-K

• S-1

A financial statement that shows what a company owns (assets), owes (liabilities), and the shareholders' equity at a particular point in time. This statement adheres to the accounting equation. What is this statement called?

• Balance Sheet

• Income Statement

• Cash Flow Statement

• Statement of Retained Earnings

The fundamental equation of accounting that must hold true for financial statements to be valid. It is Assets = Liabilities + Shareholders' Equity. What is this equation called?

• Accounting Equation

• Profit Equation

• Revenue Equation

• Depreciation Equation

A financial document that shows a company's revenues, expenses, and net income over a specific period, often called the Profit and Loss Statement. What is this document called?

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Statement of Retained Earnings

A statement that summarizes the flow of cash and cash equivalents in and out of the company. It provides insights into a company's ability to generate cash and meet financial obligations. What is this statement called?

• Cash Flow Statement

• Income Statement

• Balance Sheet

• Statement of Retained Earnings

Calculated as Total Assets minus (Intangible Assets + Liabilities), it represents the value of a company's tangible assets. What is this value called?

• Book Value

• Market Capitalization

• Net Income

• Operating Cash Flow

The current stock price multiplied by the total number of outstanding shares. Market value may not always represent the true value of a company. What is this called?

• Market Value

• Book Value

• Intrinsic Value

• Enterprise Value

Ratios calculated using key figures from financial statements to assess a company's valuation, such as P/E ratio, Enterprise Value, and EBIT. What are these ratios called?

• Price Multiples

• Liquidity Ratios

• Leverage Ratios

• Profitability Ratios

A valuation method that estimates the value of an investment based on its expected future cash flows, discounted back to present value. What is this method called?

• Discounted Cash Flow (DCF)

• Price/Earnings Ratio (P/E)

• Book Value Method

• Dividend Discount Model (DDM)