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Financial Glossary

Master financial terminology with our comprehensive glossary. Find clear, simple definitions of key business and finance terms.

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A 16

Account Validation

Verification of the financial statements.

Accounting Journal

A chronological record of financial transactions.

Accounting Relevance

Relevant to the financial records.

Accounting Standards

Standard rules for accounting.

Accounting Transaction

The recording of financial transactions.

Accounts Payable (AP)

Accounts Payable (AP) is the money a business owes to suppliers for goods or services received but not yet paid for.

Accounts Receivable

Amounts owed to a business by its customers.

Accrued Interest

Interest accumulated but not yet paid.

Accumulated Expenses

The total expenses accumulated over a given period.

Amortisation Schedule

A plan for repaying debt or depreciating assets.

Amount Due

The total sum to be paid.

Asset

An asset represents the resources owned by a business that hold future economic value.

Asset Quality

An assessment of the soundness of assets.

Asset Valuation

The process of determining the value of assets.

Audit

An audit is an independent examination of a company's financial statements or processes to verify their accuracy.

Avoir Fiscal (French Dividend Tax Credit)

The avoir fiscal is a tax credit granted to shareholders when dividends are distributed.
B 19

Balance Sheet

A Balance Sheet is a financial statement showing a company’s assets, liabilities, and equity at a specific point in time.

Bank Account

A financial tool for managing transactions and deposits.

Bank Charges

Costs associated with using banking services.

Bank Domiciliation

Establishing an account with a bank to handle transactions.

Bank Guarantee

A bank's commitment to secure a payment.

Bank Loan

Financing granted by a bank.

Bank Transaction

An operation transferring funds through a bank.

Bank Transfer

An electronic transfer of funds.

Bank Transfer Order

An instruction to transfer funds.

Bilan (French Balance Sheet)

A financial statement reflecting the economic health of a business.

Bond

A debt security used to raise funds.

Book Value

The value of an asset in the accounts.

Books of Account

The official record of financial transactions.

Break-Even Point

The level where costs and revenue balance out.

Break-Even Threshold

The point where revenue covers costs.

Budget

A forward-looking financial plan of a company's income and expenses.

Budget Management

Planning and controlling a company's finances.

Business Day

A weekday on which business is normally conducted.

Business Expenses

Expenses incurred for professional purposes.
C 23

Call Option

The right to buy an asset at a set price.

Capital Contribution

A capital contribution is the money or assets invested in a business by its owners or shareholders.

Capital Expenditure (CapEx)

Spending incurred to acquire or improve assets.

Capital Gain

The profit made on the sale of an asset.

Capital Increase

An increase in a company's equity.

Capital Utilisation

The allocation of financial resources.

Cash Flow

The movement of money into and out of a business.

Cash Flow Forecast

A projection of future cash flows.

Cash Management

Optimising a company's cash flows.

Cash Position

A company's available liquid funds.

Chart of Accounts

A system for classifying accounts.

Commercial Law

The body of rules governing business activities.

Commercial Negotiation

The process of reaching an agreement between two parties.

Commercial Use

Use for business purposes.

Company Share

A share held in a company.

Compensation and Allowances

Financial compensation for a loss or a service.

Compound Interest

Interest calculated on principal plus accumulated interest.

Consolidated Financial Statements

Combined financial reports of several related entities.

Corporation Tax

A tax on company profits.

Cost Price

The total cost of producing or purchasing a good or service.

Credit History

A record of borrowings and repayments.

Credit Questionnaire

A tool for assessing creditworthiness.

Crowdfunding

Raising funds through collective contributions online.
D 10

Debit

The recording of money leaving an account.

Debt

A sum of borrowed money to be repaid later.

Debt Level

A measure of debt relative to equity.

Debt Security

A financial instrument representing a debt.

Delivery Versus Payment (DVP)

A transaction where payment and delivery happen simultaneously.

Depreciation

The reduction in an asset's value over time.

Depreciation & Amortization

Depreciation and amortisation spread the cost of an asset over its useful life.

Depreciation Period

The period over which an asset is depreciated in the accounts.

Directors' Fees

Remuneration for attending board meetings.

Dividend

The share of profits distributed to shareholders.
E 10

Economic and Monetary Union (EMU)

A region sharing a single currency.

Economic Sphere of Influence

The region where a business has an economic impact.

Electronic Money

Money in digital form.

Employment Contract

A legal agreement defining the employer-employee relationship.

Environmental Taxation

A tax on environmental emissions.

Equity

The residual value held by the owners after debts.

Eurozone

The region using the euro as its currency.

Exchange Rate

The value of one currency relative to another.

Exchange-Traded Warrants

Tradable instruments for buying shares.

Expense Report

A document detailing business expenses.
F 16

Fair Value

Valuing an asset at its current market price.

Finance Lease

Financing that lets a business use an asset without buying it.

Financial Engineering

Using quantitative techniques to solve financial problems.

Financial Goal

A measurable financial target to reach.

Financial Guarantees

Security provided to back a financial obligation.

Financial Market

A marketplace for trading financial assets.

Financial Ratio

An indicator of financial health.

Financial Report

A document detailing financial condition.

Financial Statement

A document detailing a company's financial position.

Financial Structuring

A complex structure set up to finance a project.

Financial Webinar

An online seminar about finance.

Financial Year

The period for which financial accounts are prepared.

Fixed Costs

Constant expenses that do not vary with the level of activity.

Franchise

An agreement to operate under a brand in exchange for royalties.

Free Trade Zone

A region offering tax advantages to businesses.

Funds Flow Statement

A statement showing the sources and uses of funds.
G 7

Gain on Disposal

The profit made on the sale of an asset.

General Ledger

The main record of financial transactions.

Gérant (Company Manager)

The person responsible for running a company's operations.

Grant

Non-repayable financial support.

Gross Domestic Product (GDP)

A measure of a country's wealth.

Gross Margin

Revenue remaining after the cost of goods sold.

Gross Salary

Total pay before deductions.
H 2

Holding Company

A company that owns stakes in other businesses.

Hors Taxes (HT — Excluding Tax)

The price of a product excluding taxes.
I 9

Income Smoothing

Stabilising income across several periods.

Income Statement

A document summarising a company's financial performance.

Insurance

Insurance is a contract in which a business pays a premium to protect itself against specific risks.

Interest Rate

The cost of borrowing money, expressed as a percentage.

Intra-Community VAT Number

A tax identifier for transactions within the EU.

Inventory

All goods held for sale or production.

Investment

Committing capital to generate a return.

Investment Vehicle

A financial instrument for investing.

Invoice

A document detailing the goods or services sold and their cost.
J 3

Jeune Entreprise Innovante (JEI — Young Innovative Company)

A French status for innovation-driven startups.

Joint Venture

A business partnership between two or more companies.

Journal Entry

The recording of a transaction in the financial accounts.
K 6

Kbis (French Company Registration Certificate)

The official French company registration document.

Keiretsu

An integrated group of companies in Japan.

King-Size

An oversized, larger-than-standard format.

Knock-Out Option

An option cancelled once a price barrier is hit.

KPI (Key Performance Indicators)

Metrics used to measure performance.

KYC (Know Your Customer)

The process of verifying customer identity.
L 9

Lease

A lease is a legal contract under which one party (the landlord) allows another party (the tenant) to use a property, usually real estate, in exchange for rent. For small businesses, a well-drafted lease is crucial to se

Legal

Relating to laws and regulations.

Legal Reserve

A share of profits set aside by law.

Letter of Credit

A bank guarantee that facilitates trade.

Leverage

Using borrowed money to boost returns.

Liabilities

A company's debts and obligations.

Liasse Fiscale (Annual Tax Return Package)

The set of documents filed with the annual tax return.

Line of Credit

A flexible loan with a preset limit.

Liquidity

How quickly an asset can be converted into cash.
M 6

Marginal Utility

The additional satisfaction from a good or service.

Market Quota

A market share allocated or targeted.

Membership Dues

A financial contribution to an organisation.

Mileage

The distance travelled by a vehicle.

Mortgage

A loan secured against real estate.

Moving Average

A trend indicator based on average prices.
N 5

Net Asset Value (NAV)

The price of a unit in an investment fund.

Net Loss

When expenses exceed income.

Net Margin

Profit remaining after all expenses.

Nominal Value

The value stated on a security or note.

Non-Governmental Organisation (NGO)

A non-profit organisation independent of government.
O 8

Operating Licence

The legal right to use a technology or brand.

Operating Profit

Operating profit before exceptional items.

Opex (Operating Expenses)

The costs required for day-to-day operations.

Outstanding Balance

The total sum of receivables or financial commitments.

Over-Indebtedness

A difficult financial situation caused by excessive debt.

Overdraft Facility

An overdraft facility allows a business to spend more than the available balance in its bank account.

Overtime

Time worked beyond normal working hours.

Own Funds

Capital held by shareholders after deducting debts.
P 13

Partner

A partner is a person or entity that holds a share of a company's capital, often with management rights.

Pay Scale

A pay structure based on roles and experience.

Payment Authorisation

Authorisation to make a payment.

Payment Methods

Ways to settle a purchase.

Pledge

A security interest used to guarantee a debt.

Professional Fees

Payment for professional services.

Profit

Profit is the amount remaining after deducting costs and expenses from a company's income, representing its net gain.

Profitability

The ability to generate profits.

Promissory Note

A document promising payment at a future date.

Proof of Payment

A document proving that a payment was made.

Proportional Share

A portion of a total amount to be divided.

Provision

An allocation for future expenses.

Purchase Order

A document detailing an order placed with a supplier.
Q 3

Quitus Fiscal (Tax Clearance Certificate)

A certificate of tax compliance.

Quorum

The minimum number of participants required.

Quotité Disponible (Disposable Estate Portion)

The freely distributable share of an estate.
R 8

Receipts (Income)

The total amount of sales and income.

Registrar

An entity that manages the official registration of specific information.

Rent

Payment for the use of property.

Rent Receipt

A receipt confirming rent payment.

Repayment

A payment made to settle a debt.

Return on Investment (ROI)

A measure of gain relative to investment.

Revenue (Turnover)

The total sales generated by a business over a period.

Risk Management

Assessing and mitigating business uncertainties.
S 16

SARL (French Limited Liability Company)

A company with liability limited to contributions.

SAS (Simplified Joint-Stock Company)

A flexible structure with limited liability.

Savings

Money set aside for future use or investment.

Share

A share is a security representing a portion of a company's capital, entitling the holder to dividends and voting rights.

Share Subscription

A commitment to buy shares.

Shareholders' Equity

The net value of a company's assets after deducting its debts.

Short Selling

Selling borrowed assets to profit from a price fall.

SIG (Intermediate Management Balances)

Detailed financial performance indicators.

SIRET Number (French Business ID)

The unique identifier of a business in France.

Sole Trader

A person running a business in their own name.

Standard Operating Procedure (SOP)

A step-by-step guide to completing a task.

Stock Exchange

A market where securities are bought and sold.

Stock Market Crash

A sudden, sharp fall in the stock market.

Stock Market Index

A statistical indicator of the stock market.

Stock Options

The right to buy or sell shares.

Stocktake (Inventory Count)

A detailed list of a company's goods and stock.
T 12

Takeover Bid

An offer to buy a company's shares.

Tax Break

Tax advantages that reduce your tax bill.

Tax Classification

Categorisation to determine tax treatment.

Tax Jurisdiction

The territory that defines the applicable tax laws.

Tax Regime

The set of tax rules that apply.

Tax Return

A document filed to declare taxes owed to the state.

Tax Zoning

Standardising tax rules within an area.

Taxation

The process by which the state collects taxes.

Third-Party Payment

A system where a third party pays directly.

Ticketing

Ticketing refers to the processes and systems used to sell tickets for events, shows or transport. For small businesses, an efficient ticketing system can streamline sales management and improve the customer experience.

Trading

The activity of buying and reselling goods.

Trust

A legal arrangement for the management of assets by a third party.
U 4

Units of Account

Tools for measuring value in a contract.

Urban Business

A business located in an urban area.

Use of Funds

How financial resources are applied.

Usufruct

The right to use an asset without owning it.
V 3

Value Added

The wealth created by a business.

Value Added Tax (VAT)

A tax on the consumption of goods and services.

Vente à réméré (Sale with Right of Repurchase)

An option to buy back after a temporary sale.
W 9

WACC (Weighted Average Cost of Capital)

The average cost of equity and debt.

Warrants

An option to buy shares at a set price.

Wire Fraud

Fraud involving electronic transfers.

Wire Transfer

An electronic interbank transfer of funds.

Work in Progress (WIP)

Products still being manufactured.

Working Capital

A company's capacity to finance its day-to-day operations.

Working Hours

Set periods for daily work.

World Bank

An international financial institution for development.

Write-Off

Cancelling the value of an asset.
X 3

XAF (CFA Franc)

The currency of the Central African Financial Community.

Xerox (Photocopy)

Making a copy of documents.

XML (Extensible Markup Language)

A text-based data format for the web.
Y 7

Year to Date (YTD)

Financial performance since the start of the year.

Year-End Closing

Finalising the accounts for the year.

Yellow Book (Government Auditing Standards)

Standards of conduct for audits.

Yield

The rate of return on an investment.

Yield Curve

A graph of interest rates by maturity.

Yield Spread

The difference between two rates of return.

Yuan (Chinese Currency)

The official currency of China.
Z 4

Z-Score

An indicator of a company's bankruptcy risk.

Zakat (Religious Levy)

A compulsory religious tithe in Islam.

Zero Debt

A position with no financial liabilities.

Zero-Coupon Bond

A bond sold at a discount that pays no periodic interest.
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