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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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1. Investor’s View
Ratio: Net Income as a percentage of the Shareholders’ Equity.
ROI measures how effectively the Shareholders’ investment has been put to work to create profit. Also known as Return On Equity (ROE).
2. Manager’s View
The benefit obtained from any internal improvement or expansion, expressed as a percentage of the cost. This ROI forecast allows the Finance Department to choose between competing proposals for improving the business, by seeing which ones provide the biggest bang for the buck.