Inventory Turnover Rate
One of the many ratios used in business, the inventory turnover rate is often misunderstood, miscalculated and misused.
Inventory Turnover Rate Read More »
Fixed Assets To Debt Relationship
Every business owner, especially young entrepreneurs, must understand how long-term debt is used to finance the purchase of fixed assets.
Fixed Assets To Debt Relationship Read More »
Penny Stocks- Introduction
Those small publicly traded businesses with share prices of less than $5 and capitalization of less than $50 million are referred to as penny stocks.
Penny Stocks- Introduction Read More »
Gross, Operational and Net Profit (Differences)
The word ‘Profit’ is used loosely in the business world. Profit refers to the amount earned net of costs in a transaction. The key is defining a transaction.
Gross, Operational and Net Profit (Differences) Read More »
Hospitality Industry Characterized by High Fixed Costs
There is one unique financial characteristic that is synonymous with the hospitality industry; that is high fixed costs. Or another way of stating the same financial attribute is to simply state that the hospitality industry has low variable costs.
Hospitality Industry Characterized by High Fixed Costs Read More »
Elasticity in Economics (Lesson 22)
One of the terms synonymous with the field of economics is ‘Elasticity’. The term refers to the change in either the demand or supply (the other terms synonymous with economics) curve when there is a change in the price.
Elasticity in Economics (Lesson 22) Read More »
Real Estate Syndication
Real estate syndication is how apartment or office complexes are financed? A typical complex will have 80 to 100 units and the cost of construction will approximate $7,000,000. Where does this money come from? Your average person will think it is financed by a mortgage of some sort. Well, this is partially true, but mortgage companies will not finance 100% of the cost of construction. More like 75% maximum financing is used in constructing complexes. The balance has to come from private money.
This is where the value of real estate syndication comes into play. The arrangement is usually a two tier relationship whereby an operating partnership is created that actually owns and operates the asset (the complex). The second tier is a silent partner in the operating partnership. The following sections explain these two tiers in more detail.
Real Estate Syndication Read More »
Price to Earnings Ratio – Introduction and Interpretation
Price to Earnings Ratio (P/E) is an analysis tool used to evaluate publicly traded stock.
Price to Earnings Ratio – Introduction and Interpretation Read More »
Long-Term Debt – Financial Statement Presentation
Long term debt is one of the multiple forms of capitalizing a business. It includes bonds, secured notes and mortgage notes. In the world of small business, the most common form of long term debt is secured notes, most likely with recourse.
Long-Term Debt – Financial Statement Presentation Read More »
Vertical Integration in Business
Vertical integration in business refers to the process of gaining control over more steps of the product production stream. Whenever a business obtains or can greatly influence any one of these steps along the process of producing and selling a product, it is referred to as vertical integration.
Vertical Integration in Business Read More »