Business / Taxes Glossary

Earnings Momentum: When a company's earnings per share grow from year to year at an ever-increasing rate, that pattern is described as earnings momentum. One example might be a company whose earnings grow one . . . View Full Definition

Earnings Per Share (EPS): Earnings per share (EPS) is calculated by dividing a company's total earnings by the number of outstanding shares. For example, if a company earns $100 million in a year and has 50 million o . . . View Full Definition

Earnings Surprise: When a company's earnings report either exceeds or fails to meet analysts' estimates, it's called an earnings surprise. An upside surprise occurs when a company reports higher earnings than . . . View Full Definition

EBITDA: Earnings before interest, taxes, depreciation, and amortization are commonly shortened to EBITDA. EBITDA reports a company’s profits before interest on debt and taxes owed or paid to the gov . . . View Full Definition

Economic Cycle: An economic cycle is a period during which a country’s economy moves from strength to weakness and back to strength. This pattern repeats itself regularly, though not on a fixed schedule. Th . . . View Full Definition

Economic Indicator: Economic indicators are statistical measurements of current business conditions. Changes in leading indicators, including those that track factory orders, stock prices, the money supply, and . . . View Full Definition

Education Savings Account (ESA): You can put up to $2,000 a year into a Coverdell education savings account (ESA) that you establish in the name of a minor child. The assets in the account can be invested any way you choose . . . View Full Definition

Effective Tax Rate: Your effective tax rate is the rate you actually pay on all of your taxable income. You find your annual effective rate by dividing the tax you paid in the year by your taxable income for th . . . View Full Definition

Efficient Market: When the information that investors need to make investment decisions is widely available, thoroughly analyzed, and regularly used, the result is an efficient market. This is the case with s . . . View Full Definition

Efficient Market Theory: Proponents of the efficient market theory believe that a stock's current price accurately reflects what investors know about the stock. They also maintain that you can't predict a stock's fu . . . View Full Definition

Electronic Benefits Transfer (EBT): Electronic benefits transfer, or EBT, is a system through which recipients of certain government benefits receive and spend funds electronically, using a plastic EBT card similar to a bank d . . . View Full Definition

Electronic Bill Payment: If you have an electronic bill payment arrangement with your bank, your bills are sent to an account you designate and the bank pays them automatically each month by deducting the money from . . . View Full Definition

Electronic Bill Presentment: If you pay bills online, you may be able to take advantage of electronic bill presentment, a paper-free method of reporting your outstanding charges and the amount due. The lender may either . . . View Full Definition

Electronic Check Conversion: Electronic check conversion is a payment process in which you give a payee a check, but the actual payment is processed as an electronic funds transfer. The payment is automatically debited . . . View Full Definition

Electronic Data Gathering, Analysis, And Retrieval System (EDGAR): EDGAR is an electronic database that contains all the corporate financial reports filed with the Securities and Exchange Commission (SEC). Any company with more than $10 million in assets an . . . View Full Definition

Electronic Funds Transfer: Electronic funds transfer (EFT) is the means by which financial institutions exchange billions of dollars every day without the physical movement of any paper money. Money moves electronical . . . View Full Definition

Elimination Period: If you have disability insurance or long-term care insurance, there’s a waiting period, called the elimination period, from the time you become disabled, or are certified in need of long-ter . . . View Full Definition

Emergency Fund: An emergency fund is designed to provide financial back-up for unexpected expenses or for a period when you aren’t working and need income. To create an emergency fund, you generally accumul . . . View Full Definition

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