Financial Terms
Glossary

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link to Income Statement

Income Statement

The income statement shows the performance of a company over a period. The format is revenue minus expenses. If revenues are higher, the company has earned a net profit or net income. If the expenses...

link to Liquidity Ratios

Liquidity Ratios

Liquidity ratios show the ability of a company to pay its short-term debts. These include the current ratio, quick ratio, and cash ratio. Liquidity ratios compare current assets and current...

link to Current Ratio

Current Ratio

The current ratio shows a company’s ability to pay its short-term debts. It is the most popular liquidity ratio. The formula is current assets divided by current liabilities. What...

link to Expense

Expense

Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an asset. What is an...