One of the most common areas of frustration for students studying finance is terminology. Learning finance can sometimes feel like learning a foreign language. While we can't cover all the terminology you might encounter in finance, we want to focus on the most common areas of confusion. A solid understanding of finance terminology will make learning subsequent material much easier.
Learning Objectives—Finance Terminology:
Describe the use of the balance sheet, income statement, statement of cash flows, and equity statement.
Recognize the difference between cash flow and net income.
Compare and contrast public and private firms.
Describe the methods by which a firm can raise capital.
Identify the two methods by which a firm can pay out cash.
Define common finance acronyms including CEO, CFO, COO, IPO, EPS, PE, NYSE, NASDAQ, OTC, SEC, FDIC, BLS, GDP, CPI, and IMF.