Numbers dressed up in fancy suits pretending to be words.
A collection of investments that you constantly check at 2 AM like a new parent checking on a sleeping baby. Financial advisors will tell you not to look at it every day, which is excellent advice that nobody in the history of investing has ever followed.
Price-to-Earnings ratio, a metric that tells you how many years of current earnings you're paying for a stock. A P/E of 500 means investors expect the company to be printing money for five centuries, or that the market has collectively lost its mind. Usually the latter.
Stocks that trade for less than a dollar, which are to investing what scratch-off tickets are to financial planning. They're cheap, exciting, and almost certainly going to leave you with less money than you started with, but the thrill of potential riches keeps people coming back.
The process of distributing an acquisition's cost across the target company's assets and liabilities at fair value, usually creating a giant plug number called goodwill for the amount that can't be justified. It's accounting's way of making an overpriced acquisition look systematic.
The magical number left over after you subtract all expenses from revenue, assuming your accounting department is feeling generous about what counts as an expense. It's what companies supposedly exist to generate, though many startups operate for years as if this is merely optional. Shareholders love it, the IRS wants to tax it, and CFOs have seventeen different ways to calculate it.
The state of being equal or equivalent, whether in prices, power, or purchasing ability across markets. In finance, it's used for everything from currency exchange rates to comparing values between different assets. Economists love this word because it makes 'same-same' sound sophisticated, and it's fundamental to understanding why your dollar doesn't buy as much abroad.
In accounting, the money your company owes but hasn't paid yet—basically corporate IOUs sitting on the balance sheet like financial landmines. Also known as "accounts payable," these are the bills that make CFOs wake up in cold sweats. The bigger this number gets, the more creative the excuses to vendors become.
Income that you have to pay taxes on despite never actually receiving the cash, which is as frustrating as it sounds. Common with certain bonds, partnerships, and investment structures designed by people who hate you.
Temporarily moving assets or liabilities off the books through short-term sales with prearranged buyback agreements, essentially hiding things in plain sight. It's the financial equivalent of shoving everything into the closet before guests arrive.
The practice of adjusting a subsidiary's books to reflect the parent company's purchase price allocation, essentially forcing the acquired company to record the acquisition cost on its own books. It's accounting inception.
A bond provision allowing holders to demand early repayment at par if certain events occur, like a change of control or credit downgrade. The bondholder's nuclear option when they don't like new management's plans.
Latin for 'equal footing,' meaning creditors or securities rank equally in priority for payment. If the ship sinks, you all go down together—very democratic, if not particularly comforting.
A solemn promise with actual consequences, ranging from fraternity hazing rituals to legal guarantees securing debt repayment. In finance, it's collateral you offer up to convince someone you're good for the money; in Greek life, it's the person who hasn't earned their letters yet and does all the grunt work. Either way, someone's on the hook for something.
Money a company claims to have earned but hasn't actually collected, often involving aggressive revenue recognition or outright fantasy. It exists on paper and nowhere else.
When courts hold shareholders personally liable for corporate debts by ignoring the legal separation between company and owners. It's what happens when you treat your LLC like a personal piggy bank.
Stocks trading below $5 per share, typically on over-the-counter markets with minimal regulation or scrutiny. It's where pump-and-dump schemes go to flourish and retail investors go to lose their money quickly.
The magical moment when an investment stops being a money pit and actually returns something positive, also known as ROI's less sophisticated cousin. In finance, it's the break-even point where you finally stop losing money; in life, it's revenge served cold. Either way, someone's getting their due.
An inventory tracking system that continuously updates quantities with each transaction in real-time, as opposed to counting everything periodically and hoping nothing walked away. It requires technology, discipline, and faith that employees actually scan items.
The glorious moment when money actually leaves the vault and enters someone's pocket, whether it's dividends to shareholders or winnings to lottery players. In corporate speak, it's the amount distributed to investors who've been patiently waiting for their returns. The favorite word of anyone who's ever invested in anything, and the dreaded term for CFOs watching the bank account drain.
The moment when someone finally gets their money—whether it's a legitimate payment, a well-earned reward, or an envelope full of cash to look the other way. In finance, it's the return on investment; in real life, it's what makes sitting through terrible meetings almost worthwhile. The term conveniently covers everything from dividends to bribes.
Payments made in advance for goods or services to be received in future periods, recorded as assets until consumed. It's money you've spent that accountants insist you haven't actually spent yet.