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45 Must-Know Terms to Improve Your Financial Vocabulary in English

Want to improve your vocabulary for finance? In this detailed study guide, our experienced UK accountant and English teacher Kevin Simmons will teach you the most useful financial words and phrases. We’ve included a list of 45 terms with clear definitions and examples in context to help you feel more confident with your English at work. Don’t forget to try the exercises at the end! Ready? Let’s get to it…

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What you will learn:

I’ve noticed that many of my business English students struggle with financial vocabulary. In this study guide, I have created a list of 45 essential words and phrases to help you succeed. I have put the terms in a sensible order, given you an easy-to-remember definition, written some example sentences and provided some synonyms. I have also included some helpful bonus tips and facts from my own experience of working in finance.

Kevin Simmons, UK Accountant & English Teacher


Financial Statement terms

Note: You may also want to check out our blog post on 45 Essential English Terms for Accounting. Some of the financial terms mentioned in this section are explained in greater detail in that article.

1. An Enterprise

An enterprise is another word for a company, a business or a firm. We all know that English often has many words that mean the same thing! Where possible, it’s good to learn several synonyms for the same term.

When he purchased the company, it was a very profitable enterprise.

Enterprise Value (EV) is a calculation of the total value of a business, firm or company. E.g. Does the report give the EV for Apex Training Ltd?
2. Gearing

Gearing is a measure of how much money a company is borrowing from the banks. If a company has high gearing then it is borrowing a lot, and low gearing means that it is borrowing very little. If the company is ungeared then it is not borrowing anything. Very often you will see a calculation of this concept, which is called a gearing ratio.

The firm has borrowed a lot more money this year, so our gearing will be a lot higher than last year in the report from the analysts.

3. Return on Investment / Return on Capital Employed (ROI / ROCE)

Return on Investment and Return on Capital Employed (ROI & ROCE) are very similar. They are calculations showing how much profit is being made by a company in comparison to the cost of the investment. If you pay a lot of money for a company, then you want it to make a lot of profit. You see this calculation used a lot in reports about the Stock Market.

We didn’t pay much for this company, but this year it has made a huge profit. Our investors will be so pleased with the high Return on Investment. What great news!

4. Net Worth

Net Worth means the total value of all the assets of a business or company, minus (less) all the liabilities that it owes. The total at the bottom of a Balance Sheet is often referred to as (called) the Net Worth of the company.

The total assets of the company are £350,000 and the liabilities are £225,000, so the Net Worth is £125,000.

5. Intangible Assets

When a company has an asset that you can physically touch, such as a car or a machine, these assets are tangible (which means you can touch them). But sometimes assets exist which don’t have a physical existence. We are going to have a look at 4 of these assets straight after this point. They are Goodwill, Patents, Trademarks and Brand Value. Sometimes it is just shortened to Intangibles.

We paid £1 million for the business, but the cost of the machinery, vehicles and computers is only £100,000. The rest is made up of intangibles.

6. Goodwill

Goodwill is an intangible asset and represents the value of a business which does not take the form of physical or tangible assets. For instance, a firm of Estate Agents which has only £100,000 of assets (such as computers and furniture) could be sold for £1m. The £1m value would be so high because the firm could be very profitable. The difference between £1m and £100,000 (which is £900,000) would be the goodwill in the transaction.

The goodwill showing in our financial statements is the difference between what we paid for the three companies we bought, and the value of their tangible assets. Goodwill is a real asset for us because it represents the ability of those companies to make a good profit.

Goodwill has another meaning. It means friendly and helpful feelings or attitudes. We call Christmas ‘The Season of Goodwill’!
 7. Trademarks

A trademark is an intangible asset. It is a name or word, phrase, logo, symbol, design or sound that provides an identity to a product, service or company. If a trademark is properly registered with the government, then no competitors are allowed to copy or imitate it.

The famous m-shaped arch of MacDonalds is a trademark that is recognised all over the world and cannot be copied. 

Tottenham Hotspur (Spurs), the famous London football club, cannot sell any merchandise connected with their manager (José Mourinho) because of a trademark dispute. The rights to use the name José Mourinho are still owned by Chelsea Football Club, who José used to manage. Chelsea established a long-term trademark on his name which means that only Chelsea can use it. Unbelievable, isn’t it?
8. Patents

A patent is an intangible asset and is a licence issued by a government which gives the sole right (to exclude anybody else) from using, making or selling an invention. So, if a person or company applies for a patent for their invention, and it is approved, they get the exclusive right to use the invention. The patent can be just in one country or global.

The Dyson company, famous for vacuum cleaners and hair dryers, has taken out patents on many of its products, so that other companies cannot copy them.

Sometimes you see Pat Pending or Patent Applied For printed on a product. This is done when the patent has been sent to the government for approval, but it has not yet been approved.
9. Brand Value

Brand Value is similar to goodwill (see 6. above) because it’s an intangible asset that is not physical. Companies tend to build up their brand value rather than buy it. Good examples are Apple, Volvo or Burberry. The customers of these companies are loyal to them because the products represent a set of feelings/values and there is certainty that the product will be of the quality they expect.

We need all our staff to behave really politely with the public because we don’t want to damage our brand value. 

A great example of a global brand which has disappeared over time is Kodak. In 1997 Kodak employed 145,000 people and had a company value of $31 billion. But by 2012 the brand value was worthless and the company disappeared!
10.  Gross Profit Percentage

The Gross Profit Percentage is a way of measuring the profitability of a business, but before looking at its expenses (overheads). It is possible to compare different companies selling the same products by looking at their Gross Profit Percentages. If a company sells a product for £100, and that product cost it £75 (to make or to buy it), then the Gross Profit is £25 and the Gross Profit Percentage is 25%.

Our Gross Profit Percentage is lower than our competitors’ because we source (get) the products we sell from the UK. Our competitors buy them from China, which is much cheaper than the UK. But we can say that our products are locally made!

11. Drawings

Drawings are money taken from a business by the owner. An example could be (say) a taxi driver who takes £500 per week from all the money he earns from customers. He uses the drawings for personal expenditure such as food, clothing and household expenses. Drawings are nothing to do with the business and are NOT expenses or overheads.

We can use the verb ‘to draw’ money from a business. It means the same as ‘to take’.

My financial statements show that I made £75,000 profit as an electrician this year, but my drawings were only £35,000, so therefore I have quite a lot of money left now.

12. Compensation (or damages)

Compensation is money given to someone who has incurred (had or suffered) a loss or injury. Usually, this happens in a legal court case.

The court awarded the victims of the food poisoning in the hotel, compensation of $100,000 each.

There is a very small difference between compensation and damages. Damages can be bigger than compensation if a court decides to award more money than is actually lost by the injured person. Examples of this could be additional money for mental distress or loss of reputation.
13. Dividend

A dividend is money paid out to the shareholders of a company from the profits that the company has made. Dividends are normally paid out once per year and are approved by the Directors of the company.

13. Dividend

At the Annual General Meeting of the company, the directors voted and approved a dividend of £34 per share, payable on 31st January. 

Sometimes people are confused between a salary and a dividend. They both result in money leaving the company. A dividend is a distribution of profits already made, but a salary is an expense of the business.
14. Reserves

In Financial Statements, Reserves represent all the profits that the business has made in the past, but not paid out. A company needs to keep a healthy amount of reserves in order to be able to trade without cashflow problems.

The shareholders equity in the financial statements totalled approximately £1.25m. This was made up of £0.25m share capital and £1m of distributable reserves. The Directors did not wish the reserves to fall below £1m and therefore did not vote for any further dividends to be paid out.

Most reserves are distributable, which means that a company is legally allowed to pay them out as dividends. However, occasionally a company can have an undistributable (or non-distributable) reserve, which means that the company cannot pay it out as a dividend.
15. To understate / to overstate

In Financial Statements, when it is discovered that there is a mistake with a number, accountants don’t say ‘this number is too low/too high’. They say ‘this number is understated/overstated’. If the number is too low it is understated, and if it’s too high it is overstated.

We’ve found an error in respect of the bank balance. Our records show that it’s £105,000 but, in reality, it’s only £95,000. We’ve been overstating it for several months now. What bad news!

16. (Net) Book Value (NBV)

Net Book Value (NBV) is the value at which Fixed Assets (Non-Current Assets), such as motor vehicles or machines, are shown in the Financial Statements. Something like a vehicle will go down in value over time, which is a concept known as depreciation. So, the Net Book Value of fixed assets changes every year in the Financial Statements. NBV is sometimes known as the ‘carrying value’.

The company has just sold the Managing Director’s Mercedes for $35,000. The NBV in the Financial Statements was $33,000, so there is a small profit of $2,000.

17. Earnings Per Share (EPS)

Earnings Per Share (EPS) is a calculation used by stock market analysts when they compare different companies. The calculation is the profit of the company divided by the number of shares in issue (see 42 below) in the company. EPS can be used to help people to decide which companies to invest in.

The Earnings Per Share of Zamora PLC is £2.60, whereas the EPS for Murray PLC is only £1.90, so Zamora looks like a better investment.

Banking vocabulary

18. Bonds

A bond is a loan made by an investor to a company or government (the borrower). The investor (or bondholder) will receive interest from the borrower which is normally at a Fixed Income rate. Fixed Income means that the same rate of interest is paid every year. The Bond will usually be for a set period of time (such as 5 years or 10 years).

The Government of Curtisland is issuing 200, $1m Bonds in order to finance the building of their new railway. The Bonds are for 12 years and pay a Fixed Income rate of 9% per annum (each year). Applications are required within the next 60 days.

19. A Mortgage

A mortgage is a loan taken out to buy property or land. The loan is ‘secured’ against the value of the property (see 20. below for security and secured). Mortgages are usually long term with periods of between 20 to 35 years.

19. A Mortgage

The mortgage can be ‘Interest Only’ (see 22. below) or ‘Capital and Interest’. With ‘Interest Only’ the monthly repayments are only interest which means that the original amount borrowed (the capital) (see 21. below) will always be outstanding.

‘Capital and Interest’ repayments mean that by the end of the term (say 25 years), the Capital is repaid and there is nothing left outstanding.

Hart Bank has a new mortgage offer available with an annual interest rate of only 2.75% per annum for loans over £100,000.

20. Security (and Collateral)

Security is an asset that a bank can take from a borrower if a loan or mortgage is not repaid. The bank can then sell the asset in order to cover the amount outstanding on the loan.

My mortgage with Hart Bank is secured against the house. So, if I fail to make the repayments, Hart Bank can repossess (take back) the house and I will be homeless!

Security and collateral mean the same. But the grammar around using the words is different. These mean the same thing:
  • I secured the mortgage on my house.
  • I used my house as collateral/security for the mortgage.
21. Principal

The principal is the amount originally lent or invested. An exact synonym in this context is capital (see 19. above). So, the money that is repaid on loans is made up of principal (or capital) and interest (see 22. below).

The amount you owe on this loan is £17,000, which is made up as £15,000 principal and £2000 outstanding interest. 

Principal has other meanings too. As an adjective it means ‘the most important’. As a noun, it means the most important person or leader of an organisation such as ‘The Principal of a College’. AND, we mustn’t get principal confused with principle! Principles are the fundamental beliefs that control your behaviour. Sometimes you read about somebody being ‘a person of low principles’ (a bad person).
22. Interest

Interest is the extra amount paid on a loan (or mortgage or credit card) above the principal (or capital). Interest represents the profit of the bank making the loan. Normally, interest is expressed as an annual amount (per annum or per year). The lender charges interest, and the borrower pays interest.

Your rent is payable in advance on the 1st working day of each month. If you do not make the payment, we reserve the right to charge interest at 18% per annum, calculated on a daily basis.

23. Arrears

When somebody is late paying a loan, they ‘go into arrears’.  Arrears are the total amounts which are late being paid.

Your rent is payable in advance on the 1st working day of each month. If you go into arrears, we reserve the right to charge interest at 18% per annum, calculated on a daily basis.

24. Indebtedness

Indebtedness means the total amount of money owed (debt).

The total indebtedness to the bank of the Zamora Group is $6.6m. Zamora will struggle to repay this debt burden.

To be indebted also has a meaning that is nothing to do with finance. If you help somebody with a big problem, they might say to you ‘I am indebted to you, thank you so much’. This means that the person knows that they need to do something good for you in return for your help.
25. Covenants

Covenants are used by banks to monitor large loans they make to companies. They are calculations performed by the bank which control the actions of the borrowing companies. The borrower must ‘meet the covenant’ and if this does not happen, then the bank has the power to charge more interest or change the terms of the loan. If the covenant is not ‘met’, then it is ‘breached’ or ‘failed’.

Zamora PLC failed to meet the bank covenant which said that Zamora must make an average of at least $250,000 profit every month this year. On that basis, the bank has the power to renegotiate (see 26. below) the terms of the loan.

26. To renegotiate

When you see ‘re’ at the start of a verb, it often means to do something for the second time. Examples are ‘to reassess, to reappear, to refit, to reform, to rejoin and to recalculate’. Thus, to renegotiate in finance means to change the terms of a loan or contract in a dialogue with the customer.

We also see the words negotiable and non-negotiable. If something is negotiable it means that you have the ability to negotiate with the bank and agree something to your satisfaction. If something is non-negotiable, it means that there is no point asking to change it. The bank will not even listen!

There is no point in you trying to renegotiate the terms of this loan. All terms are nonnegotiable.

27. A credit rating

A credit rating is an opinion, based on facts, as to whether a person or company is safe to lend money to. Credit ratings are performed by specialist credit rating agencies. Sometimes such an agency can be called a Credit Rating Bureau. There is a scoring system of a person’s creditworthiness. If a person is creditworthy, then it is safe to lend to them.

I know that I have a really low credit rating so it’s going to be very difficult for me to get a loan to buy a new car. I’m very frustrated by it!

The global personal (consumer) credit rating industry is almost completely controlled by just 4 companies: Equifax, Experian, TransUnion and Innovis.


Pension Fund terms

28. Pension Scheme

A pension fund (or scheme) is an amount of money which is designed to provide monthly income for somebody who has retired from work. Normally the money is invested. If the investments are satisfactory, then the money (often called ‘the pot’) will be big enough to last for the whole life of the pension holder.

Pension Fund companies need to calculate how long people in the population will live on average. This is a highly specialised job and the people who do it are called Actuaries. An actuarial qualification has very difficult exams!

The average life expectancy in a country is called the mortality rate and the average length of people’s lives is sometimes called longevity.

The Institute of Actuaries has just announced that the life expectancy for both men and women has fallen for the first time in many years. This means that Pension Funds will require less money to fund them as people are not expected to live as long.

29. An Annuity

An annuity is a fixed amount of annual income that can be bought from your ‘pot’ (see 28. above) in a personal pension plan. This fixed amount will be your yearly (annual) income for the rest of your life. Buying an annuity has become less popular over recent years, as people prefer more flexibility with their ‘pot’ of money.

The value of your pension fund (your pot) is £100,000. This will buy you an annuity of £3,500 per annum for the rest of your life.

Annuities can be a fixed amount for life, or can go up each year in line with the rate of inflation. It is also possible to buy an annuity which will continue to provide some income for your spouse (husband or wife) when you pass away (die).
30. A Defined Benefit Pension Scheme

Large companies and Government organisations (Police, Army, National Health, Teachers etc.) have Defined Benefit Pension Schemes covering the whole of the workforce. A Defined Benefit is a guarantee to the individual (the person) that they will receive a certain amount of income every year for the rest of their lives after they retire from work.

These schemes have become much less popular with companies in recent years because the guarantee given can make them very expensive to fund. The schemes can run out of money or become underfunded.

A Defined Benefit Pension is really good for people as it provides absolute certainty as to what your monthly income will be for the rest of your life.

31. Defined Contribution Pension Scheme

Most company pension schemes set up nowadays are Defined Contribution. This means that when somebody retires, the amount of money in their ‘pot’ (the contribution) needs to be used to create monthly income for the rest of their life. There is no guarantee given by the company.

Defined Contribution schemes are more popular with companies because their commitment to employees is not as great as with Defined Benefit schemes.

Zamora PLC has just announced that it is closing its Defined Benefit Pension Scheme to new employees. New employees will be put into a Defined Contribution Pension Scheme instead. The directors of Zamora explained that the cost of maintaining the Defined Benefit Scheme is too high and they need to protect the pensions of existing members.

32. State Pension

A State Pension is monthly income paid by a country (a state) to people above the official age for retirement. In the UK this is aged 66 for men and women. The Government pay the pension, and the people (the pensioners) draw their pension. In the UK, there is a protection that the amount paid will rise with the rate of inflation.

I’m going to be 66 in two years’ time, so I can start to draw my State Pension.

Taxation vocabulary

33. Tax Return

Many working adults are required to prepare and submit a Tax Return to the government every year. The Tax Return shows everything earned by the person and all tax paid so far. It will calculate whether any more tax is due (payable) or whether too much tax has been paid (overpaid). Many countries have a system of Self-Assessment which means that it is the duty of each person to honestly declare the true figures in their Tax Return.

Tax Returns can be submitted to the government either online or with a paper version. However, the government would prefer everyone to submit a digital version online.

 34. Taxable Income

Taxable Income is the income on which you need to pay Income Tax. Under Self-Assessment (see 33. above), the online software used to enter your Tax Return, will calculate your taxable income. There may be some expenses that you pay, which can be deducted from your total income, before arriving at your Taxable Income. These expenses would be known as allowable (or deductible) expenses. (See also 35. below)

My Gross (total) income was $37,000 last year, but I had $4,000 of deductible expenses, so my Taxable Income was $33,000.

 35. Capital Gains

When you sell an asset (like a painting or an investment property) at a profit, you have made a Capital Gain. In most countries, you will have to pay tax on this profit and the tax is called Capital Gains Tax. This is different to Income Tax (see 34. above) because Income Tax is payable on your income from your job (your salary) and any investment income (bank interest, dividends, rental income etc.) that you get.

I bought that E-Type Jaguar (car) as an investment 10 years ago for £25,000. I’ve just sold it for £95,000. So, I need to pay Capital Gains Tax on my £70,000 Capital Gain.

36. Tax Avoidance

Tax avoidance is when a person uses any legal method to pay the lowest amount of tax payable. It is completely normal and any sensible person would do it. An example might be to split savings between a husband and wife which will spread out the interest income between the two of them. This is very different to tax evasion (see 37. below).

Nobody can get into trouble if they use any form of legal tax avoidance method to minimise their tax bill.

36. Tax Avoidance

37. Tax Evasion

Tax evasion is using methods to reduce your tax bill that are NOT legal. An example would be to omit (not enter) some of your income from your tax return (see 33. above). Another example would be to lie to the tax authorities when they ask you a question about your tax return. Tax evasion is completely different to tax avoidance (see 36. above).

The maximum penalty for tax evasion in the UK is a 7 year prison sentence or an unlimited financial fine. 

In reality, the difference between tax avoidance and tax evasion can be very difficult to define sometimes. There is a whole financial industry which tries to find loopholes (gaps) in tax rules, to create methods to stay within the law, and therefore legal. Governments do not like this industry (for obvious reasons!).
38. Tax Haven

A tax haven is a country (often called an offshore country or jurisdiction) which offers very low (or sometimes zero) tax rates to foreign people and companies. Tax havens often also promise to keep all information private and tell nobody about what business goes on             (happens) there.

Most of the top tax havens are island nations like the British Virgin Islands, Samoa, Malta and the Cayman Islands.

Nobody knows the exact figure, but one recent estimate is that tax havens collectively cost all the governments in the world $500 billion every year in lost tax. Tax havens have been described as ‘sunny places for shady people’!


Stock Market & Investment terms

39. Business cycles

Economists and Investors often talk about Business Cycles. There are 4 basic Business Cycles, which follow each other in time. The first is when a country is in a boom. This is when confidence in business is at its highest. Everybody is happy, profits are high, life is quite easy, and the banks will lend lots of money that can be invested in expansion. But a boom cannot last for ever!

A boom is usually followed by a recession (sometimes called a contraction). A recession is when confidence in business starts to drop. The banks become more cautious and lend less money. Investment falls and companies start to limit their activity and make people redundant (unemployed). Because there is no confidence, the recession gets worse.

Eventually the situation in business reaches its lowest point. This is called a slump (also known as a trough). A slump is when confidence is almost non-existent. All companies are just looking to survive and unemployment is high. Banks will not lend money. But a slump cannot last for ever either.

When things seem to be at their worst, a few companies will see opportunities and begin to invest. Slowly, business starts to recover. This is called a recovery (or a rally or expansion). Confidence returns, investment begins, banks start to lend and companies expand and employ more staff again. The recovery goes on, until the boom situation happens. And then the business cycle begins all over again!

Business cycles are a series of stages of the economy of a country as it expands (gets bigger) and contracts (gets smaller).

40. Bull market and bear market

A bull market is when a stock market or property market is in a situation where everybody thinks prices will continue to go up. Everybody has confidence and people are keen on buying.

A bear market is when a stock market or property market is in a situation where everybody thinks that prices are going to continue to fall. Nobody has confidence and most people are looking to sell.

We think that the bear market has arrived. Property prices are falling and nobody wants to buy. It is so different to last year, when we were in a bull market and property prices were going up every month.

41. Blue Chip

A blue-chip company is a large company considered to be of high quality, safe and stable, and capable of making excellent profits year after year. Examples of blue-chip companies include Shell, BP, HSBC, Glaxo, Apple, Coca-Cola, and Microsoft.

All of the shares I own are in blue-chip companies because I don’t like to take risks by investing in companies that are less safe.

42. Market Capitalisation

Market capitalisation (often shortened to ‘Market Cap’) is a term used about public companies whose shares can be bought on a Stock Exchange. Market Capitalisation is the total ‘real-time’ value of the company. It is calculated by multiplying the price of a share in the company by the number of shares in existence (‘in issue’)

The market capitalisation of Zamora PLC is $25,000 million. There are 50,000 million shares in issue and today’s share price is $0.50 per share.

43. Share suspension

Sometimes a Stock Exchange will not allow shares in a public company to be bought or sold (‘traded’) and this is called ‘suspending the shares’. There are several reasons why this happens. It might be that the company is late in producing its Financial Statements, or possibly because there is news about the company which could mislead investors.

The idea of share suspension is to protect investors, to protect the company and to protect the reputation of the stock market.

44. Share Options

A share option is when a company grants (gives) the right to a person (often an employee) to buy shares in the company in the future at an agreed price. Normally, this price will be attractive (low) to encourage the person to buy.

At the agreed point in the future, the person will look at the actual share price (on the stock market), and compare it to the option price. If the option price is lower, then the person may wish to proceed and buy the shares (‘exercise the option’).

Other benefits (perks) that we offer to our employees include free healthcare, childcare vouchers and a share option scheme.

45. Due Diligence

When a company decides to buy another company, it needs to do an investigation in advance to establish that there are no problems with the company it wants to buy. This is called ‘doing due diligence’. Another example would be a Venture Capital firm investing money in a company which it thinks has an exciting future. The Venture Capital firm will do due diligence before it makes the investment.

We’ve done our due diligence and we are very sorry but we have now decided not to go ahead with our proposed investment in your company. We uncovered too many issues. 

There are several types of due diligence. These include: legal due diligence, financial due diligence, human resource due diligence, manufacturing due diligence and commercial due diligence.
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Test your knowledge: Financial vocabulary exercises

Exercise i.

Follow the story about Murray PLC in the following sentences and complete them with the most suitable accounting term a-c (based on the context). 

  • Murray PLC is in the news today because it has failed to meet its ______________ in respect to its borrowings from Nateast Bank.
    Covenants      b. Credit rating    c. Tax Return
  • Murray PLC has gone into___________ in respect to the $4 million bank loan it took out last year to buy new properties.
    a. Interest    b. Arrears     c. Bonds
  • The total__________________ to Nateast Bank now stands at $26 million and Murray PLC is struggling to make the payments.
    a. Capital Gains    b. Gearing ratio    c. Indebtedness
  • Analysts say that the________________ of the company has been getting worse for a couple of years.
    a. Bonds     b. Gearing Ratio    c. Pension Scheme
  • In addition, it has been noticed that the_______________ paid each year to shareholders have been falling for the last 4 years.
    a. Arrears     b. Principal    c. Dividends
  • And there is no doubt that the ___________________of the company is now very weak.
    a. Credit Rating     b. Blue Chip   c. Patents
  • The biggest part of the indebtedness to Nateast is a 25 year___________ in respect of its borrowings in 2014 to build its head office at a cost of $10 million.
    a. Annuity     b. Reserves    c. Mortgage
  • Perhaps Nateast Bank should have done better_______________ when it lent so much money to Murray PLC.
    a. Due Diligence     b. Market Capitalisation     c. Share options
  • As a result of all this, the share price is falling and the ___________________ of Murray has fallen by 40% to $8 million.
    a. Tax evasion    b. Market Capitalisation    c. Tax haven
  • Whilst Murray PLC has always been considered to be a _______________ company, that is certainly no longer the case.
    a. Blue chip    b. Due diligence    c. Bonds
Exercise ii.

Match parts 1-5 with a-e to make complete sentences.

  1. We sold that property at a huge profit so
  2. The company is being investigated by the police so
  3. The company’s head office is in the Cayman Islands which
  4. Tax avoidance is legal whereas
  5. The company is trying to turn its defined benefit pension scheme into
  1. tax evasion is illegal.
  2. we’ll have a big Capital Gains tax bill.
  3. is undoubtedly considered to be a tax haven.
  4. a defined contribution pension scheme.
  5. the shares have been suspended.
Exercise iii.

Choose the correct synonym a-c for each financial term. 

  • To fail to meet a covenant.
    a. breach    b. mount    c. hide
  • They are late paying their bank loan.
    a. Blue chip    b. in arrears    c. principal
  • A mortgage
    a long-term property loan.   b. Assets   c. Fixed Assets
  • A recovery
    a. A slump.   b. a recession    c. a rally
  • My tax bill is due
    payable.   b. ready   c. early
  • He exercised the share option.
    a. refused    b. took up.   c. lent
  • There are 1000 shares in issue.
    a. waiting.   b. missing     c. in existence
  • You can buy and sell shares at the stock market.
    a. trade.   b. leave   c. hide
  • Net book value (NBV)
    total value.   b. carrying value    c. trade value 
  • I drew £6,000 from the company last month.
    a. took.   b. spent    c. wrote


  • 1/a   2/b   3/c   4/b   5/c   6/a   7/c   8/a   9/b   10/a 
  • 1/b   2/e   3/c   4/a   5/d 
  • 1/a   2/b   3/a   4/c   5/a   6/b   7/c   8/a   9/b   10/a
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Written by Kevin S.
— Financial English Tutor
Written by Kevin S.
— Financial English Tutor