Definitions of Selected Financial Terms Ratios and Adjustments for Microfinance

The primary objective of this document is to put forward standard definitions for the selected financial terms, and suggest a standard method of calculating certain financial ratios. This section defines certain key financial accounts used by MFIs. The definitions are provided in two main sections, (1) those found on the income statement; and (2) those found on a balance sheet. There are additional definitions included that will assist the reader in understanding the formulas for the financial ratios. Most are presented in the order in which they would appear on the financial statement.