Finance is the management of money at the personal, corporate, and public levels. If you’re an enthusiast for learning finance, you have a high-tide career in front of you. By studying finance, you lay open a path to become a major in financial planning, corporate finance, and investments. To have a good career ahead of them, the finance majors get to develop the various financial modeling skills needed to settle into various roles including, analysts, financial planners, bank officers, loan officers, etc. To help you understand the career well, here are seven important terms in finance you must know. But first, let’s understand the reasons to study finance.
Why Should I Study Finance?
If you’re into finance, you must have this question in your mind as to, “why should I study finance?” So, here are a few reasons for studying finance and seek a career in the same.
Finance is Universal
Since the financial sector is growing leaps and bounds, the job availability in this career is high. Finance is at the core of any business-decision, making so your sound knowledge of the financial terms will give you an edge over the others.
The Industry is Evolving
With the constant revolution of student loan financing, payment technology, and cryptocurrency, the field of finance is evolving. Another major evolution of finance alongside technology is taking place under the term, fintech. So, studying finance is beneficial with more job opportunities in the banking sector.
You’ll Develop Problem Solving Skills.
Since finance involves formulas, excel sheets, and ratios, you ought to develop keen problem-solving skills in the course of studying it. You’ll become an analyst looking at the value and its scope in the coming future. That puts your brain into deeper understanding, in turn, developing your problem-solving skills, which are helpful even in the world outside your office.
7 Important Financial Terms
Assets
Economic resources in a business with economic value.
Types of assets include:- Current, Fixed, Tangible, Intangible, operating, in operating.
Liabilities
The state of the company responsible for contributing to the economic value like debts
Balance Sheet
The sheet that subtracts the company’s total liabilities with the total assets to find the company’s net worth
Expenses
As per the Internet Revenue Code, business expenses are “ordinary and necessary” to run a business or trade.
Cash Flow
The overall movement of funds including income and expense in business each month
Profit and Loss
Profit is the money that a company gains in business.
Losee is the money that a company loses in business.
Income Statement
The ‘profit and loss statement’ that analyzes the company’s total profit and total loss
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