What Are Some Common Investment Terms?

What Are Some Common Investment Terms?

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.