You receive periodic interest payments and get back the loaned amount at the time of the bond’s maturity-or the defined term at which the bond can be redeemed. When you buy a bond, typically from the government or a corporation, you’re essentially lending them money.
Bonds: Bonds represent a form of borrowing.Asset Allocation: Asset allocation refers to how you choose to spread your money across different investment types, also known as asset classes. Fixed Assets: Which can’t immediately be turned into cash, but are tangible items that a company owns and uses to generate long-term incomeģ.Current Assets: Which can be converted to cash within a year.There are different types of assets, including: Assets: Assets are items you own that can provide future benefit to your business, such as cash, inventory, real estate, office equipment, or accounts receivable, which are payments due to a company by its customers. Intangible assets are non-physical assets that are essential to a company, such as a trademark, patent, copyright, or franchise agreement.Ģ.
Amortization: Amortization is a method of spreading an intangible asset's cost over the course of its useful life. Here are 20 financial terms and definitions you should know. But first, you need to grasp the terminology. Understanding the financial implications of your decisions and clearly communicating those decisions to key stakeholders can help advance your career. Narayanan, who teaches the online course Financial Accounting: To learn more about why you should further your financial knowledge if you're in a non-finance role, watch the video below featuring Harvard Business School Professor V.G. Quite frankly, it’s what keeps your company afloat an organization can’t operate successfully if it’s not financially sound. It’s what helps you balance short-term expenses with long-term goals, and meaningfully measure your team’s performance. It’s what determines the number of employees you can hire, and dictates your annual budget. But developing your financial skills so that you have a financial fluency can help you excel professionally and make a greater impact on your company.įinance affects every business function. For non-finance professionals, the thought of talking data, forecasts, and valuations can seem daunting.
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