Financial Terms Dictionary
S
S&P 500
The S&P 500 is a U.S. stock market index composed of the 500 largest U.S. companies. The S&P 500 is the proxy for the U.S. large-cap stock market.
Many index funds use the S&P 500 index as their benchmark. The S&P 500 is the most common benchmark for both the U.S. large-cap market and also the U.S. stock market as a whole.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) is a federal agency that administers the Securities Exchange Act of 1934 and regulates the financial markets. Companies that issue securities to the public or are listed on an exchange are required to file audited financial statements with the SEC. In addition, the SEC has broad powers to prescribe the accounting practices and standards in the U.S.
Simple interest
Simple interest is interest that accrues on only the principal and not the accrued interest. Simple interest always grows slower than compound interest. Simple interest = principal x rate x time. Compound interest earns interest on both principal and the previous interest.
Statement of cash flows
See cash flow statement.
SWOT analysis
SWOT analysis or SWOT matrix is a strategic exercise to analyze an organization’s competition. SWOT helps a company identify its competitive advantage.
SWOT stands for the four areas of the matrix:
- strengths
- weaknesses
- opportunities
- threats
