Business
Asset
Something owned that has economic value.
The financial glossary
Clear words. Better understanding.
Quick explanations of everyday money, business and investment terms.
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Investing
Bond
A debt investment: an issuer borrows money and promises repayment under stated terms. Default is possible.
Everyday money
Budget
A plan for allocating income to spending and saving.
Business
Cash flow
The timing and amounts of money moving in and out.
Investing
Compound interest
Interest calculated on the original amount and accumulated interest.
Everyday money
Debt
Money owed that must be repaid under agreed terms.
Investing
Diversification
Spreading investments to reduce concentration risk. It cannot remove all risk.
Everyday money
Emergency fund
Money set aside for unexpected expenses or interruptions to income.
Economics
Exchange rate
The price of one currency expressed in another.
Everyday money
Expense
A cost incurred, such as transport, food or a service fee.
Everyday money
Fees
Charges for a product or service, separate from or additional to interest.
Economics
Inflation
An increase in the general level of prices over time.
Everyday money
Interest
A charge for borrowing, or a payment for lending or depositing money.
Business
Liability
An obligation or amount owed to another party.
Investing
Liquidity
How readily an asset can be converted into cash without a substantial price reduction.
Everyday money
Net income
For a salary, take-home pay after deductions. In business, profit after applicable expenses.
Everyday money
Principal
The original amount borrowed or invested, excluding interest.
Business
Profit
Revenue less expenses for a period. It can differ from cash available.
Economics
Purchasing power
The goods and services an amount of money can buy.
Investing
Return
A gain or loss on an investment, including income and changes in value.
Investing
Risk
Uncertainty about an outcome, including the possibility of losing money.
Everyday money
Savings
Money kept for future use instead of spent now.
Investing
Shares
Units of ownership in a company. Their value and any distributions can change.
Investing
Time horizon
The time before you expect to need invested money.
Business
Working capital
Current assets minus current liabilities; one measure of short-term financial resources.
Sources & further reading
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Definitions are brief educational summaries. Product terms and local requirements vary. International sources do not establish Zimbabwean rules.
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