Annual Report
Yearly report of the company's financial condition, required of every publicly traded company. The report describes the operations of the company and it includes the current balance sheet and income statement.

Asset
In corporate finance, assets include items of value such as cash, land, and equipment.

Assets are separated on a company's balance sheet into two categories:
Current Assets: Assets which can be converted into cash within a year or less.
Fixed Assets: Assets which are expected to remain fixed for longer than one year.

Balance Sheet
A snapshot of assets, liabilities and resulting equity. Equity is the net ownership value of the company at a point in time -- typically prepared quarterly and annually. The Balance Sheet shows the company's state of affairs on a given date. This report typically includes a the summary comparison for the past 5-years.

Capital Expenditure
Outlay of money to acquire or improve long-term assets, such as buildings and machinery.

Cash Basis Accounting
Accounting procedure. Income and expenses are recognized when they are actually paid or received in cash. The alternative is to report on a Accrual Accounting method. Income and expenses are recognized when entered into the books of a company. So if it's not cash, then it must be accrual!

Cash Equivalents
Assets that are of such high liquidity and safety that they are virtually as good as cash. Usually includes bank accounts and marketable securities, such as government bonds and Bankers' Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within ninety days.

Cash Flow
In investments, it represents net earnings plus depreciation and other non-cash charges. Cash Flow is synonymous with Cash Earnings. It indicates the ability of the company to pay dividends.

Current Assets
Assets which are likey to be converted into cash in 12 months or less. Includes cash, accounts receivable and inventoy.

Current Liabilities
Liabilities coming due within 12 months. Includes interest, salaries, accounts payable and other short-term debt.

Current Ratio
Current Assets divided by Current Liabilities. The ration indicates a company's ability to pay its current obligations from Current Assets. A Current Ratio less than 1.0 indicates short-term financial weakness. Conversely, a Current Ratio greater than 1.0 indicates short-term financial strength. The higher the ratio, the more liquid the company.

Depreciation
Amortization of fixed assets, such as plant and equipment --- to allocate the cost over their depreciable life. Depreciation reduces taxable income but does not reduce cash.

Edgar
Electronic Data Gathering and Retrieval is the system used to make corporate financial reports available to investors. Some of the key documents; 10-K (annual report), 10-Q (quarterly reports), and 8-K (significant developments such as the sale of a company unit).

Extraordinary Income/Expense
Nonrecurring occurrence --- one-time event such as income from the sale of assets. Financial Statements must account for the Extraordinary Item. Earnings are usually reported before and after taking the effects of Extraordinary Items into account.

Financial Statement
Written statement reflecting a company's financial condition. Includes a balance sheet and income statement --- may also include a statement of changes in working capital and net worth.

Fiscal Year
One-year period (12 consecutive months) designated by a company as its annual accounting period. At the end of the Fiscal Year, the books are closed and profit and loss is determined.

Most companies choose to have their corporate Fiscal Year coincide with the calendar year. However the Fiscal Year does not have to coincide with the calendar. The Fiscal Year for the U.S. Government is October 1 to September 30.

Fixed Asset
Tangible property that is used in the operation of the business. Some examples: plant, machinery, equipment, furniture and fixtures. You will find them on the Balance Sheet listed at their net depreciated value.

Income Statement
Also called the Profit & Loss Statement. It is a summary of revenues, costs, and expenses over a period --- typically prepared quarterly and annually. Together with the Balance Sheet at the end of the accounting period, it constitutes a company's Financial Statement. This report typically includes a the summary comparison for the past 5-years.

Interest
Cost of using money. Usually expressed as a rate for one year, or annual rate of return.

Interim Statement
Financial report covering part of fiscal year, usually a quarterly report (covering 3 months). If updates shareholders of interim financial progress and newsworthy information. It includes a quarterly changes in the balance sheet and income statement.

Inventory
Corporate: Value of a company's raw materials, work in process, supplies used in operations, and finished goods. Inventory value changes with price fluctuations. Accounting methods include First In, First Out (FIFO) and Last In, First Out (LIFO).

Security Firms: Securities bought and held by a broker or dealer for later resale.

Inventory Turnover
Ratio of annual sales to inventory. Shows how many times the inventory is sold and replaced during an accounting period. The higher the turnover, the better the inventory is being managed.

Long Term Gain or Loss
Taxes: The profit or loss realized from the sale of stock, bonds, or other property held for longer than six months.

Quarterly Report
Quarterly Report (every three-month period) of the company's financial condition, required of every publicly traded company. The report describes the operations of the company and includes the current balance sheet and income statement.

Short Term
Accounting: Assets that will are expected to be converted into cash within one year. Liabilities that come due within one year.

Techical Analysts: Stock Analysts think of short-term as less than six months. Bond Analysts think of short-term as less than three years.

Short Term Gain or Loss
Taxes: The profit or loss realized from the sale of stock, bonds, or other property held for less than six months.