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THE FINANCIAL DICTIONARY

Financial Terms & Definitions A to Z

Search our comprehensive database of financial definitions, formulas, calculation examples, and real-world trading context scrutinized by credentialed CFA, CFP, and CPA reviewers.

ESSENTIAL CONCEPTS

Most Searched Terms Today

Corporate Finance #E

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization.

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Personal Finance #C

Compound Interest

Interest calculated on initial principal plus accumulated interest.

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Equity Valuation #P

Price-to-Earnings (P/E)

Ratio for valuing a company measuring current share price relative to EPS.

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Valuation #D

Discounted Cash Flow (DCF)

Valuation method estimating intrinsic value based on future cash flows.

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Macroeconomics #Y

Yield Curve Inversion

Macro condition where short-term yields exceed long-term bond yields.

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Portfolio Theory #S

Sharpe Ratio

Measure of risk-adjusted excess return per unit of volatility.

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Corporate Finance #F

Free Cash Flow (FCF)

Cash generated after subtracting expenditures for capital assets.

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Accounting #E

Operating Income (EBIT)

Profit realized from an entity's ongoing core business operations.

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Corporate Finance #C

Capital Expenditures (CapEx)

Funds used by an enterprise to acquire, upgrade, and maintain physical assets.

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Valuation #E

Enterprise Value (EV)

Comprehensive measure of a company's total economic valuation.

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Risk Management #B

Beta

Measure of an asset's systematic risk and volatility relative to the broader market.

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Monetary Policy #Q

Quantitative Easing (QE)

Monetary policy where a central bank purchases government bonds to inject liquidity.

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Financial terminology is rife with nuances that make or break trading decisions and tax filings. Our review board of CFA charterholders, CFP practitioners, and CPA accountants continuously stress-tests our formulas and examples against changing IRS rules and market conventions.

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