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.
This phase of lesson sets explains intrinsic value and financial analysis. There is no single formula that is universal; there are at least six common formulas to calculate intrinsic value. The various formulas require the user to understand the five different financial statements and how to properly interpret them.
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.
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.
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.
Tangible and intangible are terms with several different meanings. A lot of well educated folks have a difficult time providing an all inclusive definition.
Syndication refers to a group of individuals or business entities working together to achieve a set goal(s).
Gross Domestic Product is defined as the total production for the country. It is measured by including all the dollars spent to purchase products/services from all the various sellers of goods.
There are several definitions associated with the term ‘Book Value’ and depending on the context of its use, determines the correct definition and proper use.
No other federal government creation is more misunderstood than the Federal Reserve System. The Federal Reserve’s primary purpose is to act as the central banking system for the United States. Formed in 1913, the Federal Reserve was tasked by Congress with three primary functions. One – maximize employment in the United States. Two – stabilize prices (control the inflation rate) and three – influence the interest rates for long-term notes. Since 1913 the Federal Reserve has expanded its role to include setting the monetary policy and regulating the entire US banking system.
Every business owner needs to know the difference between insolvency and bankruptcy. Often these two terms are misunderstood and improperly used in conversation.
A document indicating ownership in a corporation is often referred to as common stock. It identifies an equity position in a business. The document or certificate is commonly referred to as a security and provides certain rights to the holder (owner). These rights include voting and residual value upon liquidation of the company.