Accounts receivable, Capital Assets, Current assets, Cash flow, Depreciation and Net worth.Do you know what these words mean and where they are being used? Yes, youve heard about them but did you actually try to find out what they mean? Perhaps you are thinking that you wont need them thats why there is no need to learn them. Maybe, you are thinking you can have a lawyer with you to do things regarding your finances. Being unaware of the basic financial terms can cost you a lot of your earnings, dont you know? Having a lawyer or a financial advisor to explain things to you when you need it will surely cost you a lot. You are going to learn today about those financial terms mentioned above and hopefully, youll find them useful.

Accounts receivable are the money you owned. These are the amounts you receive from sales of assets or services you have given. While capital assets are those assets you acquired to start the business. Examples of capital assets are land, buildings or space and equipment. Current assets are items like cash, accounts receivable and inventory. They are assets that can be turned over and can be converted to cash. Stocks and marketable securities are examples.

Cash flow is the moving of money in and out of your business. It finds out the credit worthiness of your business. The difference between the cash out and cash in is important. If more money flows in, it is cash positive. If more money flows out, it is cash negative.

Depreciation is the estimated loss of value of assets overtime. It is the decline in the value of a good. Say for example when you bought the latest laptop at 500 dollars, overtime its price will decrease because a new model will be released and that is what you call depreciation. Net worth is the assets minus the liabilities. Liabilities refer to the debts of a company to its creditors. Accounts payable is an example of liabilities. Knowing these terms, like Michael Geffrard did, is the first step towards financial wealth.

If you want your business to flourish or help someones business to succeed, knowing financial terms is important. Even if you just want to keep your money safely in a bank, financial terms will help you understand better how to have higher returns. Michael Geffrard also did this and started with small banks until he found his own investment banking company.

Take good care of your financial status, which can determine your future. If you do not know how to hold your money properly, let someone teach you or have your family handle it for you. Try to make financial advancement like Michael Geffrard did.

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