Financial Glossary
Quick definitions for the metrics and concepts you see in StockLrn.
Goodwill
An intangible asset representing the premium paid over fair market value in an acquisition.
Depreciation
The allocation of a tangible asset's cost over its useful life.
Amortization
The gradual write-off of an intangible asset's cost or a loan principal over time.
Working Capital
The difference between current assets and current liabilities, measuring short-term liquidity.
Current Ratio
A liquidity ratio comparing current assets to current liabilities.
Company Overview
High-level context about what the company does and how it makes money.
Call Option
A contract giving the holder the right to buy an asset at a specified price before expiration.
Put Option
A contract giving the holder the right to sell an asset at a specified price before expiration.
Strike Price
The predetermined price at which an option holder can buy or sell the underlying asset.
Options Premium
The price paid by the buyer to the seller for an options contract.
Implied Volatility
The market's forecast of the likely magnitude of a stock's price movement, reflected in option prices.
Options Greeks
Metrics (Delta, Gamma, Theta, Vega, Rho) that measure different risk dimensions of an options position.
Yield Curve
A graph showing interest rates across different bond maturities.
Financial Statements
Core reports that show profitability, balance sheet strength, and cash generation over time.
Income Statement
A report of revenue, expenses, and profit over a period (quarter or year).
Cash Flow Statement
Tracks cash generated and used by operations, investing, and financing.
Net Income
Profit after all expenses, interest, and taxes.
EBITDA
Earnings before interest, taxes, depreciation, and amortization (a rough cash-earnings proxy).
Free Cash Flow (FCF)
Cash from operations minus capital expenditures; cash that can be used for buybacks, dividends, or debt.
Bond Yield
The return an investor earns on a bond, expressed as an annual percentage.
Coupon Rate
The annual interest rate paid by a bond issuer on the bond's face value.
Duration
A measure of a bond's sensitivity to interest rate changes, expressed in years.
Credit Rating
An assessment of the creditworthiness of a bond issuer, assigned by rating agencies.
Municipal Bonds
Debt securities issued by state and local governments, often offering tax-exempt interest income.
Treasury Securities
Debt instruments issued by the U.S. government, considered among the safest investments.
Dividend Yield
Annual dividend payment divided by stock price, expressed as a percentage.
Index Fund
A fund designed to track the performance of a market index.
Gross Domestic Product
The total monetary value of all goods and services produced within a country over a period.
Inflation Rate
The rate at which the general level of prices for goods and services rises over time.
Federal Funds Rate
The interest rate at which banks lend reserves to each other overnight, set by the Federal Reserve.
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