Financial Terms You Should Know

With April being Financial Literacy Month, we thought it would be important to share some financial terms we think you should know. Financial literacy is something that everyone struggles with not just athletes. We don’t talk about the subject enough and when we do, people tend to be reserved. It’s okay to not know something but it’s not okay to not ask. When you hear your financial advisor use an acronym to explain something with your money and you fail to ask, who’s the one that suffers? People ask you all the time how many players are allowed to be on the field at once? Or how come that player was offsides? What’s extra time mean? We are so use to being subject matter experts in our craft we are afraid to be learners in a new subject that directly affects our every day lives. With that being said we listed 30 financial terms for every day of April. We also included some acronyms of terms that may have gone over our heads when someone explains :


A security is a tradable financial asset. The term commonly refers to any form of financial instrument


A debt security, under which the issuer owes the holders a debt and is obliged to pay them interest or to repay the principal at a later date, termed the maturity date

Public Equity

asset class where individuals and/or organizations can buy ownership in shares/stock of a company through a public market such as the New York Stock Exchange

Mutual Fund

an investment program funded by shareholders that trades in diversified holdings and is professionally managed.


a sustained increase in the general price level of goods and services in an economy over a period of time

M&A…Mergers and Acquisitions

a general term that refers to the consolidation of companies or assets through various types of financial transactions

Term Sheet

A term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made. ... Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.

IRR…Internal Rate of Return

The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

Capital Structure

The way a corporation finances its assets through some combination of equity, debt, or hybrid securities

Victory Tax

Paying standard tax rates on Olympics bonuses

Jock Tax

Income tax levied against visitors to a city or state who earn money in that jurisdiction.

CAC… Customer Acquisition Cost

The cost associated in convincing a customer to buy a product/service

LTV… Lifetime Customer Value

A prediction of the net profit attributed to the entire future relationship with a customer


The process in accounting by which a company is brought to an end 

Common Stock

Common stock is a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are at the bottom of the priority ladder in terms of ownership structure; in the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debt holders are paid in full

Preferred Stock

A form of stock which may have any combination of features not possessed by common stock including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument.

SAFE …Simple Agreement for Future Equity

An agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warranty, except without determining a specific price per share at the time of the initial investment.


The gradual reduction of a debt over a given period

APR…Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment

Loan to Value

A financial term used by lenders to express the ratio of a loan to the value of an asset purchased

EBIDTA…Earnings before interest, tax, depreciation and amortization

A company's earnings before interest, taxes, depreciation, and amortization is an accounting measure calculated using a company's net earnings, before interest expenses, taxes, depreciation, and amortization are subtracted, as a proxy for a company's current operating profitability.

B2B….Business to Business

A situation where one business makes a commercial transaction with another

B2B…Business to Consumer

A process for selling products directly to consumers

SAAS…Software As A Service

A software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted

KPI…Key Performance Indicator

A measurable value that demonstrates how effectively a company is achieving key business objectives. 


A bond, deed, or other document kept in the custody of a third party and taking effect only when a specified condition has been fulfilled

Tax Deduction

A reduction of income that is able to be taxed and is commonly a result of expenses, particularly those incurred to produce additional income


When money is withdrawn from a bank account and the available balance goes below zero


The degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns


Payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum