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Financial Glossary - E
EBITDA - Stands for "Earnings before Interest, Taxes, Depreciation, and Amortization". When companies publish their financial statements, the most important metric for investors is the company's income, which is calculated as the company's revenue minus all its expenses. Some companies also publish their EBITDA, which, these companies usually claim, provides a more true picture of the company's profitability than the "income" number.
ETA - An acronym for Electronic Transfer Accounts. ETAs are used for direct deposit by people who receive regular checks from the federal government, such as Social Security benefit payments.
Elimination Period - The number of days, starting from the date of an insurable event, before benefits are paid on certain types of insurance policies (e.g., long-term care, disability).
Emergency Fund - A sum of money set aside in a readily accessible savings account for unanticipated events such as unemployment, medical bills, and car repairs. A sum of money to cover basic living costs for three months is recommended.
Estate Planning - The process of organizing your assets for use during your lifetime and distribution after death in accordance with prevailing state and federal laws.
Expense - Item for which household income is spent, including basic needs, such as housing and utilities, and discretionary purchases, such as entertainment and clothing.
Expense Ratio - The percentage of mutual fund assets deducted for management and operating expenses. The expense ratio and other information about a fund can be found in its prospectus.