BY: Pankaj Bansal Founder at Newspatrolling.com Understanding key financial terms is essential for managing personal finances, making investment decisions, and comprehending economic news. Here are 25 essential financial terms you should know: Asset: Anything of value owned by an individual or company, such as cash, stocks, real estate, or personal property. Liability: A financial obligation or debt owed by an individual or company to another party. Equity: The value of an ownership interest in an asset or company, calculated as the difference between the asset’s value and any liabilities on it. Revenue: The total income generated by a company from its business activities, usually from the sale of goods and services. Expense: The costs incurred by a business in the process of earning revenue, including operating expenses, interest, and taxes. Profit: The financial gain realized when revenue exceeds expenses, also known as net income. Cash Flow: The movement of money in and out of a business or individual’s accounts, important for understanding liquidity. Budget: A financial plan that estimates income and expenses over a specific period, helping to manage finances and achieve goals. Net Worth: The total value of an individual’s or company’s assets minus their liabilities, indicating financial health. Investment: The act of allocating money or resources with the expectation of generating an income or profit. Dividend: A portion of a company’s earnings distributed to shareholders, usually in the form of cash or additional stock. Interest: The cost of borrowing money, usually expressed as a percentage of the principal, or the income earned on savings or investments. Inflation: The rate at which the general level of prices for goods and services rises, eroding purchasing power. Deflation: The decline in the general price level of goods and services, often leading to reduced consumer spending and economic slowdown. Bear Market: A period in which stock prices are falling, often by 20% or more, and investor sentiment is negative. Bull Market: A period in which stock prices are rising, typically by 20% or more, and investor sentiment is positive. Stock: A type of security that represents ownership in a corporation and a claim on part of the corporation’s assets and earnings. Bond: A fixed-income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental. Mutual Fund: An investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. ETF (Exchange-Traded Fund): A type of investment fund traded on stock exchanges, much like stocks, that holds assets such as stocks, commodities, or bonds. Index: A statistical measure of changes in a representative group of individual data points, commonly used to track the performance of stock markets. Credit: The ability to borrow money or access goods or services with the understanding that you’ll pay later. Debt: Money borrowed by one party from another, often used to make large purchases that they could not afford upfront. Liquidity: The ease with which an asset can be converted into cash without affecting its market price. Diversification: A risk management strategy that mixes a wide variety of investments within a portfolio to reduce exposure to any one asset or risk.