Financial English: 30 Key Terms Every Finance Professional Should Know
Essential English vocabulary for finance and banking — financial statements, banking and investment terms, and the language for describing results — with plain-English definitions and examples.
Whether you work in a bank, an accounting firm or a company’s finance team, you will meet the same core English words again and again — in reports, meetings, emails and client calls. Here are 30 essential terms, grouped by topic, each with a plain-English explanation and an example.
Financial statements
| Term | Meaning | Example |
|---|---|---|
| revenue (US) / turnover (UK) | total money from sales before costs | Revenue rose to $12 million. |
| gross profit | revenue minus the direct cost of sales | Gross profit improved as material costs fell. |
| gross margin | gross profit as a percentage of revenue | We have a gross margin of 42%. |
| operating costs (OPEX) | regular costs of running the business | We need to cut operating costs by 5%. |
| net profit | what remains after all costs, interest and tax | Net profit was $1.3 million. |
| EBITDA | earnings before interest, tax, depreciation and amortisation | Investors compare companies on EBITDA. |
| assets / liabilities | what a company owns / what it owes | Total assets reached €80 million. |
| equity | assets minus liabilities — the owners’ value | The founders hold 60% of the equity. |
| cash flow | money moving in and out in a period | We’re profitable, but cash flow is tight. |
| depreciation | spreading an asset’s cost over its useful life | Depreciation is €40,000 a year. |
Profit is not cash. A company can be profitable and still run out of cash if customers pay late — that’s why finance teams watch cash flow as closely as profit.
Banking and investment
| Term | Meaning | Example |
|---|---|---|
| principal | the original amount of a loan | The principal is €200,000. |
| interest rate | the cost of borrowing, as a percentage | The loan has a fixed rate of 5.2%. |
| collateral | an asset promised as security for a loan | The warehouse was used as collateral. |
| default | failing to repay a loan as agreed | If the borrower defaults, the bank can sell the collateral. |
| portfolio | all the investments someone holds | Her portfolio is 60% shares, 40% bonds. |
| bond | a loan to a company or government paying fixed interest | The government issued ten-year bonds. |
| dividend | a share of profit paid to shareholders | The board announced a dividend of €1.20 per share. |
| yield | income from an investment as a percentage of its price | The bond yields 4%. |
| liquidity | how quickly an asset can become cash | Cash offers the highest liquidity. |
| KYC / AML | Know Your Customer / Anti-Money Laundering checks | The account opens once KYC is complete. |
Describing results and trends
| Term | Meaning | Example |
|---|---|---|
| to rise / fall by … to … | by = size of change; to = final figure | Revenue rose by 10% to €5.5m. |
| year on year (YoY) | compared with the same period last year | Q3 sales were up 12% year on year. |
| to be driven by | to be caused mainly by | Growth was driven by corporate clients. |
| to be offset by | to be cancelled out by something opposite | Higher sales were offset by higher costs. |
| to level off / to peak | to stop changing / to reach the highest point | Sales peaked in December. |
| variance | difference between budget and actual | The main variance is in marketing. |
| in line with / ahead of / behind budget | compared with the plan | Costs are in line with budget. |
| guidance / outlook | the company’s forecast | We are raising our full-year guidance. |
| sharply / slightly / steadily | big / small / regular change | Margins fell slightly. |
| a ballpark figure | a rough estimate (informal) | Can you give me a ballpark figure? |
Putting it together: a 30-second results summary
“In the third quarter, revenue rose by 12% year on year to €48 million, driven mainly by corporate clients. Gross margin remained stable at 41%. Operating costs increased sharply because of our IT investment, so net profit fell slightly to €5.2 million. We are keeping our full-year guidance unchanged.”
Writing numbers correctly
- Use a decimal point: €3.8m, not €3,8m.
- Use a comma for thousands: €410,000.
- Always say what a number is compared with: budget, last month or last year.
Our English for Finance & Banking course covers all of these terms and more — financial statements, banking and investment, presenting results, explaining products and risk to clients, finance idioms and financial emails — with video lessons, exercises, a final test and a certificate.
Frequently asked questions
What is the difference between revenue and profit?
Revenue (UK: turnover) is all the money from sales before costs. Profit is what remains after costs are taken away — gross profit after direct costs, net profit after all costs, interest and tax.
What is the difference between “rose by” and “rose to”?
“By” gives the size of the change (rose by 10%); “to” gives the final figure (rose to €5.5 million).
How do you write numbers in English financial documents?
Use a decimal point and a comma for thousands: €3.8m or €3,800,000 — not €3,8m.
Are “shares”, “stocks” and “equities” the same?
In everyday finance English they mostly mean the same thing: ownership in companies. “Equities” is more formal; “stocks” is more common in American English.