Glossary of Financial Terms - I

Income Statements

A financial statement that displays a breakdown of total sales and total expenses.

Incorporation

Process by which a company receives its Articles of Incorporation allowing it to operate as a corporation.

Initial Public Offering

A firms first offering of its shares to the investment public, after registration requirements of the various securities regulators have been met.

Insurance Company

A firm licensed to sell insurance to the public.

Interest

A charge for the use of money supplied by a lender.

Interest Factor

Numbers found in compound interest and annuity tables. Usually called the FVIF or PVIF.

Interest Rate

Cost of using money, expressed as a rate per period of time, usually one year.

Interest Rate Risk

Possibility that interest rates will rise during the term of a loan thereby increasing the annual cost of borrowing.

Intermediary

An independent third party that may act as a mediator during negotiations.

Inventory Turnover

Ratio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period.