Data & Finance for Work & Life
Finance content for professional development.
Loans and interest are tricky, and so is calculating total interest on them. You have probably heard terms like “simple interest,” “compound interest,” and “APR,” but may be unsure what they mean. To understand and calculate the total interest, you need to know the type of interest and how it is calculated on a periodic …
Most people have one job providing their primary source of income. If you have a side hustle or part-time gig, you have a second source of income. The same thing applies to businesses. While a company’s primary revenue stream comes from the sale of a core product or service, they can have “side hustles,” which …
Other Income: Definition, Detailed Examples & Negative OI Read More »
Successful transactions end in purchase prices — a value agreed upon by two or more parties. The transaction may or may not involve a negotiation, but it always involves an agreed price. Commercial transactions are usually straightforward: one person sells a product, service, or asset, and another person buys it at face value. For example, …
If you’ve ever signed a contract and wondered if the shown price reflected what you actually pay, you’re familiar with “other costs.” For example… When you purchase a home, sometimes you’re charged strange processing, notary, and transfer fees. When you buy a car, you might find out that there’s a title transfer fee that wasn’t …
Other Costs (Other Expenses): Definition, Examples & Formula Read More »
Finance is all about returns. What are the earnings paid to financial sponsors? How much cash can a new venture bring to the company? Financial analysts always look for ways to maximize cash earned per dollar spent. This basic concept is called return on investment. Return on investment is equal to [earning – investment]/[investment]. However, …
Interest Yield: Definition, Formula, Examples & Calculator Read More »
“Price range” sounds intuitive, and most of us have an idea what it means in our daily lives. But outside restaurants, hotels, and used cars, the term comes up in business, where it takes on a more nuanced meaning. In short, a price range is the spread of numbers between the lowest and the highest …
What is a price range? Business Meaning, Synonyms & Examples Read More »
Even for experienced finance professionals, interest is a tough topic. Between fixed, variable, simple, accumulated, accrued, and others, I find myself needing a review from time to time. Specifically, accrued interest and compound interest are easy to confuse because they both “grow” over time, just not in the same way. In this article we’ll define …
Asset impairments are normal changes on a company’s balance sheet. They’re how accountants prudently reevaluate asset worth in alignment with the market. Specifically, when a company records an asset, they record it at the purchase price and depreciate its value over time. However, if price simulations indicate that the free market value (FMV) of the …
If you’re anything like me, information about tax bases feels frustratingly opaque. While it’s critical for financial analysts to understand them, we usually leave tax topics to accountants. I’ve found that the easiest way to tackle tax base is starting with the tax base of assets. The tax base of an asset is a formal …
Cash is king… but not every stakeholder sees cash the same way. For example, equity shareholders may want to know how much cash is available after paying loans and interest, whereas debt stakeholders want to know how much cash is available before loans and interest. These diverging needs for stakeholders has given birth to Free …
Levered vs Unlevered Free Cash Flow: What’s the Difference? Read More »
