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The Income/Outcome® Contextuarya visual glossary of corporate finance |
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We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).
The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
To get more information about the authors, please see our Directory of Contributing Editors.
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Ratio: Debt divided by Equity.
This ratio is a measure of the company’s safety, or ability to withstand adversity.
This is a real What do you mean by that? term. What is meant by ‘debt'? Total Liabilities? Interest-bearing debt? Long-term debt?
See the discussion at Leverage.