#financial-literacy
Essential financial knowledge and skills for business owners and entrepreneurs
A call is the right to buy and a put the right to sell — 100 shares per contract. Delta tracks the stock, theta drains time, vega prices volatility.
Yield is dividends over price; payout ratio is dividends over earnings. A soaring yield with coverage above 100% usually means the price fell ahead of a cut.
Net income flows into retained earnings and opens operating cash flow; ending cash must tie to the balance sheet to the dollar.
Diluted EPS assumes every option, warrant, and convertible note becomes shares; it is the worst-case number — value the company on it, not on basic EPS.
Skipped cumulative preferred dividends stack up as arrears that must clear before common holders see a dollar — yet stay a footnote until declared.
A secured card, a credit-builder loan, or authorized-user status builds your first FICO score in about six months — paid on time, every time.
Yield to maturity folds a bond's price, coupon, and time left into one annualized return — the only number that compares any two bonds fairly.
APR prices borrowing without compounding; APY pays savings with it — compare APR to APR, APY to APY, and run the conversion before close calls.
A balloon loan amortizes over 30 years but matures in 5 to 7, leaving most principal due at once — refinance early or fund the lump sum deliberately.
Opportunity cost is the value of your next-best forgone alternative — price DIY bookkeeping against a $400 hire before your hours subsidize it.
Interval funds repurchase 5–25% of shares quarterly at NAV, but oversubscribed offers prorate — so check the policy, fees, and history first.
RESPA locks lender fees to the Loan Estimate quote, bans referral kickbacks, and caps escrow cushions at two months — know the buckets before you sign.
