Financial Statements

Assets

Everything a company owns or controls that is expected to bring future benefit.

Cash Flow Statement

The report showing actual cash coming in and going out, split into operating, investing and financing.

Cost of Goods Sold

COGS

The direct cost of making the products a company sold in the period.

Current Ratio

Current assets divided by current liabilities: a test of short-term liquidity.

Gross Margin

The share of revenue left after paying the direct cost of goods sold.

Income Statement

Profit & Loss statement

The report that shows a company's revenue, expenses and profit over a period.

Inventory

Raw materials, work in progress and finished goods a company holds for sale.

Liabilities

Everything a company owes to outsiders.

Net Profit Margin

PAT margin

Net profit as a percentage of revenue.

Operating Margin

Operating profit as a percentage of revenue.

PAT

Profit After Tax, Net profit

The profit left for shareholders after every expense, interest and tax.

PBT

Profit Before Tax

Profit after all expenses and interest, but before income tax.

Revenue

Top line, Turnover

Money a company earns from selling its goods or services, before any costs.

Shareholders' Equity

Net worth, Book value

What would be left for owners if all assets were sold and all liabilities paid.

Capex

Capital expenditure

Money spent on buying or upgrading long-term assets like plants and machinery.

Debt-to-Equity Ratio

D/E

Total borrowings divided by shareholders' equity.

Depreciation & Amortisation

D&A

The yearly charge that spreads the cost of long-lived assets over their useful life.

EBIT

Operating profit

Profit from operations before interest and tax.

EBITDA

Earnings Before Interest, Tax, Depreciation and Amortisation

Operating profit before interest, tax and non-cash depreciation charges.

Free Cash Flow

FCF

Cash left after running the business and paying for capital investments.

Interest Coverage Ratio

How many times operating profit covers interest payments.

Net Debt

Total borrowings minus cash and cash equivalents.

ROCE

Return on Capital Employed

Operating profit earned on all the capital a business uses, debt and equity together.

Working Capital

Short-term assets minus short-term liabilities: the cash tied up in daily operations.