Finance Glossary
Plain-English definitions of essential finance and accounting terms.
Amortization
Spreading the cost of an intangible asset, or repaying a loan, over time.
Balance Sheet
A statement of a company's assets, liabilities and shareholders' equity at a point in time.
Capital Expenditure (CapEx)
Money spent to acquire or upgrade long-term physical assets.
EBITDA
Earnings before interest, taxes, depreciation and amortization.
Enterprise Value
The total value of a company's operations: equity value plus net debt.
Free Cash Flow
Cash generated by operations after capital expenditures.
IRR
Internal rate of return: the discount rate that makes NPV equal zero.
Net Present Value (NPV)
The present value of future cash flows minus the initial investment.
Working Capital
Current assets minus current liabilities.
WACC
Weighted average cost of capital, the blended required return of debt and equity holders.