Asset-based finance is a type of financing that is based on the value of an underlying asset, such as real estate, inventory, or accounts receivable. The asset serves as collateral for the loan, and the lender has a lien on the asset. If the borrower defaults on the loan, the lender can seize the asset … Read more
The functional currency of a company is the currency of the primary economic environment in which the company operates. The functional currency of a company is typically the currency of the country in which the company’s headquarters are located. For companies that operate in multiple countries, the functional currency is typically the currency of the … Read more
A shareholder is an individual or institution that owns at least one share of a company’s stock. Shareholders have a vested interest in the success of the company and, as such, should have a say in its operations. Most companies allow shareholders to vote on corporate matters, such as the election of directors or the … Read more
“Intellectual property” refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Intellectual property is divided into two categories: 1. Industrial property, which includes patents for inventions, trademarks, industrial designs and geographical indications; 2. Copyright, which includes literary, musical and artistic works, such … Read more
Most recent quarter (MRQ) refers to the quarter that ended most recently before the current date. For example, if the current date is January 15, 2019, the MRQ would be the quarter that ended on December 31, 2018. The term is typically used when referring to financial statements or other data that is reported on … Read more
Asset Sales refers to the sale of a company’s assets in order to generate cash. This can be done in a number of ways, but the most common is through the sale of property, plant, and equipment. Other assets that can be sold include patents, copyrights, and trademarks. The main reason companies engage in asset … Read more
The term “winding up” in business refers to the process of bringing a company to an end. This can be done voluntarily by the shareholders or the directors of the company, or it can be done through the courts. Once a company has been wound up, its assets are sold off and the proceeds are … Read more
A capital lease is a long-term lease that represents ownership of the leased asset. The lessee makes lease payments to the lessor over the term of the lease, and at the end of the lease, the lessee owns the asset. Capital leases are typically used for equipment, vehicles, and real estate. What is capital lease … Read more
The cost of capital is the price that a company must pay for funds, either through equity or debt financing. The cost of equity is the return that shareholders expect to earn on their investment, while the cost of debt is the interest rate that a company must pay on its borrowings. The cost of … Read more
A sub account is a financial account that is subordinate to another account. A sub account can be used to track activity within a larger account. For example, a company might have a main account for tracking sales and a sub account for tracking sales by region. How do I open a sub account? There … Read more
