Common financial terms for new investors include net income, earnings per share and GAAP, states Investopedia. Earnings per share refers to a company’s net income minus any dividends paid, divided by the number of shares a company has outstanding.
GAAP is the acronym for generally accepted accounting principles, according to Investopedia. Companies use GAAP as a means to standardize financial statements such as balance sheets and statements of cash flow, notes QuickMBA. Net income refers to a company’s total earnings or any profit the company generated. In its basic form, companies determine their net incomes by subtracting all their expenses from their revenues.