A tax base is the amount of money on which a tax is levied. The tax base can be the value of goods or services, the income of individuals or businesses, or the value of property. The tax base is used to calculate the amount of tax that is owed. What is a tax simple … Read more
Noninterest Expenses: What You Need to Know What type of expense is bank charges? Bank charges are a type of business expense. They are the fees charged by banks for services such as processing transactions, maintaining accounts, and providing loans. What type of account is interest income? Interest income refers to the interest that is … Read more
The term “Income From Continuing Operations” refers to the net income that a company generates from its ongoing, regular business activities. This excludes any one-time or unusual items that might distort the company’s overall financial picture. Income from continuing operations is often the most important measure of a company’s financial health, since it gives the … Read more
What is an operating ratio? How do you calculate an operating ratio? How do you find the operating percentage? Operating margin, or operating income margin, is a company’s operating income divided by its revenue. The operating income is a company’s total revenue minus its cost of goods sold and operating expenses. To calculate a company’s … Read more
An accrued dividend is a dividend that has been earned by the shareholders of a company, but has not yet been paid out. This can happen when a company’s dividend payment date falls after its fiscal year-end. In this case, the dividend is said to be “accrued” until it is paid out to shareholders. What … Read more
A ROSCA is a type of informal savings club. Members of a ROSCA agree to make regular contributions into a common fund. The fund is then used to make loans to member of the group. The loans are typically given out in order of rotation, so that everyone in the group gets a chance to … Read more
Covered interest rate parity (CIRP) is an important concept in international finance that states that the forward exchange rate between two currencies equals the spot exchange rate adjusted for the interest rate differential between the two countries. In other words, CIRP ensures that there is no arbitrage opportunity between the two currencies. The covered interest … Read more
An annuity is an insurance product that provides guaranteed income for a specific period of time, or for life. An annuitization is the process of converting an annuity contract into a stream of payments. What are the three basic phases in the life of an annuity? There are three basic phases in the life of … Read more
The term “avoidable cost” refers to a company’s opportunity cost associated with a particular decision. In other words, avoidable cost is the cost that could have been avoided if the company had chosen a different course of action. There are two types of avoidable cost: sunk cost and variable cost. Sunk cost is a cost … Read more
Income per capita is a measure of the average income earned by each person in a particular group, usually a country. It is often used as a measure of economic progress or standard of living. However, it has some limitations as a measure of economic well-being, and should be considered alongside other measures such as … Read more
