Accounting definitions

Dividend: definition: the share of profit payable to shareholders on their shares.

An expense is an outflow of company assets to pay for a service or product needed to generate business revenue.

The gross margin is what remains after you divide your gross profit by your net sales.

Gross profit is what remains after you subtract the cost it took to make the product you sold from your sales revenues.

Net income: definition: the difference between the revenue created by a company in a set time period minus the expenses.

Revenue: definition: the measure of assets generated by a company’s business operations during a set period.

Shareholders’ equity, or net worth: The net worth of a company equals the total assets minus the total liabilities.

Share: definition: a measure of ownership of a corporation; also known as a stock.

Shareholder: definition: an owner in a corporation; a person holding shares in a corporation.

Solvency: definition: the ability of a business to pay its debts as they come due.