A corporate resolution is a formal document that is approved by a company’s board of directors or shareholders that outlines a specific action or course of action that the company intends to take. Resolutions are typically used to authorize major financial decisions, such as issuing new shares of stock, issuing bonds, or authorizing a merger … Read more
A back-of-the-envelope calculation is a quick and dirty estimate of a value or quantity, typically done without the benefit of extensive research or formal calculations. The term is often used in business settings to refer to quick estimates of the potential profitability of a new product or business venture. For example, a company considering launching … Read more
Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions. The term “accounting” is also used to refer to the profession of accountants. The history of accounting can be traced back to ancient times. The first known records of financial transactions date back to … Read more
Vendor financing is a type of financing in which a company finances the purchase of its products or services by its customers. The company provides the customer with the financing, which the customer then uses to purchase the product or service. The customer then pays back the loan over time, with interest. Vendor financing can … Read more
Capital addition refers to the increase in the value of a company’s assets. This can be achieved through a number of means, including the purchase of new assets, the reinvestment of profits, and the acquisition of other companies. Capital additions can be used to finance a number of different activities, including the expansion of operations, … Read more
. Optimal Capital Structure: Meaning, Factors, and Limitations. What is capital structure with example? A company’s capital structure is the way in which it finances its operations and growth by using different sources of funds. The main types of capital include debt, equity, and hybrid securities. A company’s debt-to-equity ratio is one way to measure … Read more
Value Engineering: Definition, Meaning, and How It Works. What are the four fundamentals of Value Engineering? 1. Value engineering is the process of creating value for a company through the strategic use of resources. 2. Value engineering focuses on the efficient use of resources to create value for the company. 3. Value engineering strives to … Read more
Assets under administration (AUA) is the total market value of assets for which a financial institution provides administrative services. This includes investment management, recordkeeping, and other support services. The term is most commonly used in the context of investment management firms and retirement plan administrators. AUA is different from assets under management (AUM), which is … Read more
Unrestricted net assets are those assets of a company that are not earmarked for any specific purpose and can be used for general corporate purposes. The term is usually used in the context of non-profit organizations, where unrestricted net assets are those that can be used to fund operations, programs, and other general expenses. How … Read more
A capital dividend is a dividend that is paid out of a company’s capital, rather than out of its profits. Capital dividends are usually paid out of a company’s share premium account, which is the account that represents the excess of the par value of a company’s shares over the amount that was actually paid … Read more
