finance

Financial Terms You Must Know

finance

In the field of business and marketing, there are so many people who are quite good at entrepreneurship in general. A majority of them have some or the other kind of built in skills lie communication skills, sales another factors. But no matter how skillful a person is, one has to be aware of the financial terms which are most commonly used in the market.

Now here is a list of some of the top finacila terms that are used in the market on a common basis.

Assets

These are referred to those financial resources that any business entity usually has. These may include things like the products that are there in the inventory, the office supplies and the furnitures that have been purchased. Now these assets will count towards the total value worth the business as they could be sold when the business is going through some serious financial problems.

Liabilities

Now liabilities refer to the debts or the loans that may be on the business which they may have incurred during the initial days of establishing the business. It may have also incurred during the growth and the maintenance of its operations. Examples are bank loans, monies, credit card debts etc.

Expenses

Now the business expenses refer to that cost that is incurred every month by the businesses for the operation of it. This may includes rent cost, legal costs, utility cost, salaries of the employees etc.

Cash flow

The cash flow refers to the mobility of the funds every month that happens through your business. This includes both income and expenses. The cash flow also helps in determining the long term solvency.

Bottom line

This is refered to that final amount which is a summation of all the amounts that have been earned or lost by the end of the month by any business. In general, it is basically the last financial figure and depicts the earning of the business in terms of whether it has increased or decreased.

Financial report

A financial report is a report that is used to depict all the transactions and the expenses that have taken place and thus represent the account in a comprehensive manner. It is created by the potential inventors by both the internal and the external sources.

Financial statement

This is similar to the financial report but it contains the list of all the various kinds of finance related activities that have taken place. Although the financial statement is considered to be relatively a more formal kind of document tha the financial report.

Cash flow statement

As the name suggest, the terms cash flow statement is used to refer to that money that came into the business and that left the business in a given specific duration of time. It is that money which entered and then excited in a given time frames.

Income statement

The income statement depicts the profit earned by a business entity in a given specific period of time.

Balance sheet

The term balance sheet is used to refer to a particular snapshot that is used as an overall representation of the financial situation in a given time frame.

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