Understanding finance is crucial for professionals, even those outside finance roles. Financial knowledge helps you make better business decisions, manage budgets, and communicate effectively with stakeholders.

To start, mastering key financial terms is essential. Terms like assets (items of value), liabilities (what you owe), cash flow (money moving in and out), and working capital (daily operational funds) provide a foundation for financial literacy.

Concepts such as ROI (return on investment), profit margin, and valuation help evaluate the success of projects and investments. Other important terms include EBITDA, amortization, capital gain, and depreciation, which describe cash generation, asset value, and long-term financial planning.

By understanding these 20 terms, including equity, balance sheet, and cash flow statement, professionals can analyze company performance, plan strategically, and gain confidence in financial discussions.

HBS Online offers courses like Leading with Finance and free resources like a Financial Terms Cheat Sheet to help professionals improve their financial fluency and impact business outcomes effectively.