Finance for Dummies

Your ABCs to Finance and Investment

What Is Free Cash Flow?

Free cash flow (FCF) is one of the best indicators of a company’s health, and unlike other indicators, free cash flow is quite easy to understand. You can think of free cash flow as the deposit that you take to your bank after paying all your monthly bills. If the deposit keeps on increasing, then […]

What Is EBITDA?

The value of an enterprise is hard to define given all the varying metrics that need to be part of the calculations. An entrepreneur might wonder what is EBITDA and how does it impact business practices. This calculation method is used by different professionals when looking to find out the financial standing of a company. Over […]

What Are Earnings Per Share?

If you own shares of stock, the concept of Earnings Per Share is an important one. To understand the idea, one first should comprehend that it is based on the fact that publicly-traded companies (usually these are the large ones like IBM or Walmart) long ago devised a method of dividing themselves into shares of […]

What is Equity?

Equity refers to all the resources invested in a particular business by the owners. It is commonly called owner’s equity or net assets. In other words, the term describes the net investment of stockholders or owners in a business. Equity is governed by the equation that follows: Equity = Assets – Liabilities. The following example gives […]

What is GDP?

GDP, or gross domestic product, is a measure of the size of a country’s economy. It is calculated using the value of final goods and services produced within the borders of a nation, whether or not the producers are of foreign nationalities. To calculate the GDP of a country, economists add the total private consumption, […]

What is a Good Credit Score?

The question of what is a good credit score bothers most people, especially those looking to take a loan. This is because of the common knowledge that lenders, banks, credit card companies, and other financial service providers use your credit worthiness to deny or approve a loan. For that reason, this article provides a detailed […]