Lesson

Economy & Finance

Economic and financial vocabulary

≈ 15 min 8 block(s)

Text

Economy & Finance: Key Vocabulary

This lesson introduces essential vocabulary used in business, finance, and the economy. You'll learn high-frequency terms, how they are used in context, and common collocations that appear in reports, meetings, and the news.

  • Focus on meaning, collocations, and usage in professional contexts
  • Practice distinguishing similar terms (e.g., revenue vs. profit)
  • Use examples from company reports and market summaries

Table

Key Finance Terms and Examples

Term Part of speech Definition Example
revenue noun Total income generated by sales before expenses The company's revenue increased by 8% this quarter.
profit margin noun The percentage of revenue that becomes profit after expenses Improving the profit margin is a priority for the management team.
inflation noun A sustained rise in the general price level of goods and services High inflation reduced consumer purchasing power last year.
liquidity noun How quickly assets can be converted into cash without loss The bank improved liquidity by selling short-term securities.
interest rate noun The percentage charged on borrowed money or paid on savings The central bank raised the interest rate to curb inflation.
investment noun / verb Money put into assets expecting future returns; to place funds into assets The firm announced a new investment in renewable energy projects.

Tip

How to learn and use finance vocabulary

Focus on collocations and contexts where terms appear:

  • Pair nouns with common verbs: 'generate revenue', 'reduce costs', 'raise capital'
  • Note fixed expressions: 'profit margin', 'interest rate', 'cash flow'
  • Distinguish related terms: 'revenue' (income) vs 'profit' (income minus expenses)

Practice terms in short business sentences and read financial summaries

Example

Examples in context

The board reviewed the quarterly revenue report.

Investors are concerned about rising inflation and its impact on margins.

We need to improve liquidity to meet short-term obligations.

The CFO presented a plan to reduce operating costs and increase profit.

Tip

Common mistakes to avoid

Watch out for these universal errors when learning finance vocabulary:

  • Confusing similar terms (e.g., revenue vs. profit) — check definitions and usage
  • Using incorrect prepositions: 'invest in' (not 'invest on'), 'increase by' (not 'increase with')
  • Plural vs. uncountable nouns: 'information' is uncountable; 'revenues' vs 'revenue' differ by context
  • Wrong collocations: say 'raise capital' or 'obtain funding', not 'make capital'

If unsure, read sentences from business reports to see natural usage.

Quiz

Which term refers to the total income generated by a company before expenses?

Hint: Think about the company's total sales income before expenses

Quiz

Complete: The company's _____ increased by 10% last quarter.

Hint: Think about the company's total income from sales

Quiz

Which phrase best describes the money available to pay a company's short-term obligations?

Hint: Consider the term that describes available cash for operations

Key Points

Vocabulary

revenue

noun CEFR B1 //ˈrɛvənuː//

Total income generated by sales before expenses are deducted.

The company's revenue rose after launching the new product.

Vocabulary

profit margin

noun CEFR B2 //ˈprɒfɪt ˌmɑːrdʒɪn//

The percentage of revenue that remains as profit after expenses.

Improving the profit margin will increase shareholder value.

Vocabulary

inflation

noun CEFR B2 //ɪnˈfleɪʃən//

A sustained increase in the general price level of goods and services.

High inflation can erode consumers' purchasing power.

Vocabulary

liquidity

noun CEFR B2 //lɪˈkwɪdɪti//

The ease with which an asset can be converted into cash without significant loss.

The company improved liquidity by selling non-core assets.

Vocabulary

interest rate

noun CEFR B1 //ˈɪntrəst reɪt//

The percentage charged on borrowed money or paid on savings.

Rising interest rates can increase borrowing costs for firms.

Vocabulary

investment

noun / verb CEFR B1 //ɪnˈvɛstmənt//

Money put into assets expecting future returns; also the act of committing money to such assets.

The company increased its investment in technology this year.