Convertible Promissory Notes Vs. Series A Preferred Stocks

Investors may be wary of buying common stock early in a company’s development because there is no guaranteed return on an investment in common stock. Should the company fail, holders Read More

What Is the Correct Way to Calculate Gross Leverage for a Hedge Fund?

Like mutual funds, hedge funds offer investors the opportunity to pool their capital for investment purposes. But hedge funds differ from mutual funds in a number of significant ways, most Read More

Ratio Analysis Vs. Fund Flow Analysis

An investing strategy based on fundamental analysis looks primarily at the value of the underlying companies when deciding which stocks to buy, hold or sell. Ratio analysis is a core Read More

Dividend Rate vs. APR

When you look at banking, savings and investment options, different parts of the financial services industry use different terms to quantify yields and rates. Dividends is primarily, but not exclusively, Read More

Grants to Build a Nest Egg

You cannot get a legitimate government or private grant to build your own nest egg. Find out about the topic of grants that can be used to build a nest Read More

What Effect Would Business Investment Have on Aggregate Supply?

Business investment has a number of different effects on aggregate supply depending on the situation at hand. Find out what type of effect business investment would have on aggregate supply Read More

Samba Effect

The Samba Effect refers to a 1999 devaluation of the Brazilian Real currency. Find out more about the Samba Effect with help from a certified financial planner in this free Read More

How to Convert a Monthly IRR Into an Annual IRR

Internal rate of return, abbreviated IRR, is a calculation often used to compare investments such as real estate and insurance policies. In simple terms, the IRR defines the growth of Read More

NYSE Rules on Penny Stocks

The New York Stock Exchange has some very specific rules when it comes to penny stocks. Learn about the NYSE rules on penny stocks with help from a certified financial Read More

Definition of Cyclical Investing

Cyclical investing is a type of investing that’s performance is tied to the business cycle. Find out about the definition of cyclical investing with help from a certified financial planner Read More

The Ratio of Long-Term Assets to Owners’ Equity

The ratio of long-term assets to owners’ equity is called the asset to equity ratio. Learn about the ratio of long-term assets to owners’ equity with help from a certified Read More

What Are First & Second Rounds of Equity Participation?

A few specific things typically happen during the first and second round of equity. Find out about the first and second round of equity with help from a certified financial Read More

Active vs. Passive Small Cap Value

Active and passive small cap value are two things that have their fare share of advantages and disadvantages. Learn about active versus passive small cap value with help from a Read More

In Finance Terms, What Is Common Stockholders Equity?

In financial terms, common stockholders have a very specific definition. Learn about common stockholders with help from a certified financial planner in this free video clip. Read More

What Is Capitalization of Securities?

There are two methods of determining capitalization when you’re talking about the value of a company. Find out about capitalization of securities with help from a certified financial planner in Read More

Understanding Phantom Shares

Phantom shares are a specific type of share that you cannot buy. Get tips on understanding phantom shares with help from a certified financial planner in this free video clip. Read More

What Is Imputed Equity?

Imputed equity is basically equity that can’t be given any kind of method to how its earned. Learn about imputed equity with help from a certified financial planner in this Read More

What Is Unrealized Gain Loss?

Unrealized gain loss is a concept that has a very specific definition. Find out about unrealized gain loss with help from a certified financial planner in this free video clip. Read More

The Formula to Divide Equity in a Partnership Sell

You need to divide equity in a partnership sell in a very specific way. Find out the formula to divide equity in a partnership sell with help from a certified Read More

Trading Stocks and Knowing When to Sell

A large part of trading stocks is knowing when to sell. Learn about trading stocks and knowing when to sell with help from a certified financial planner in this free Read More

What Is a Serial Bond?

A serial bond is not something that comes out of a cereal box. Learn about the definition of a serial bond with help from a certified financial planner in this Read More

Revenue Sharing of Hedge Funds

A hedge fund is a different kind of investment. Find out about revenue sharing of hedge funds with help from a certified financial planner in this free video clip. Read More

The Advantages of Internal and External Equity

Internal and external equity are two things that have their fair share of advantages. Find out about the advantages of internal and external equity with help from a certified financial Read More

About Reverse Floater Bonds

Reverse floater bonds are more commonly known as inverse floater bonds. Learn about reverse floater bonds with help from a certified financial planner in this free video clip. Read More

Dividend Strategy & International Stocks

Dividend strategy and international stocks are two things that go well together. Learn about dividend strategy and international stocks with help from a certified financial planner in this free video Read More

What Is Maturity for a Note Payable?

The maturity date of a note payable describes the day the note is paid off. Find out about the maturity for a note payable with help from a certified financial Read More

What Is a Hurdle Rate for Investment?

Hurdle rate is a term used to describe the comfort level you want when you make an investment. Find out about a hurdle rate for investment with help from a Read More

SEC Yield Vs. Estimated Annual Yield

SEC yield and estimated annual yield are two pretty different things. Find out about SEC yield versus estimated annual yield with help from a certified financial planner in this free Read More

What Is a Bond Transaction?

A bond transaction is when you buy or sell a bond. Find out about bond transactions with help from a certified financial planner in this free video clip. Read More

What Is SMA in FOREX?

The term SMA stands for simple moving average. Find out about SMA in FOREX with help from a certified financial planner in this free video clip. Read More

What Makes a Company a Takeover Target for a Private Equity?

When companies begin to target other companies to take over they are looking for a few key things. Find out about what makes a company a takeover target for another Read More

What Is the Purpose in a Suit of Equity?

A suit of equity has a very unique purpose in the world of investing. Find out about the purpose of a suit of equity with help from a certified financial Read More

Advantages of External Equity

External equity certainly has its fair share of advantages. Find out about the advantages of external equity with help from a certified financial planner in this free video clip. Read More

What Is an Equity Method Investee?

An equity method investee has a very specific definition that every investor should know. Learn about an equity method investee with help from a certified financial planner in this free Read More

Equity Strategies Using a Normalized Return

Certain equity strategies are at play when using a normalized return. Find out about equity strategies using a normalized return with help from a certified financial planner in this free Read More

Bond Vs. Equity Yields by Year

Bonds and equities are two different terms used to describe two different things. Learn about bonds versus equity yields by year with help from a certified financial planner in this Read More

What Is Accumulated Equity?

In the world of investing, accumulated equity is one term you should familiarize yourself with. Find out about accumulated equity with help from a certified financial planner in this free Read More

How to Buy Oil Company Royalties

Oil and gas royalties refer to land, an estate or an oil reserve a person or a business buys as an investment to make long-term profits from oil and natural Read More

How Much of My Portfolio Should Be in REIT?

Real estate investment trusts — companies that purchase commercial and rental properties — were often ignored and considered a niche area of investing until the 1990s, but double-digit gains in Read More

What Measures the True Liquidity of a Firm?

Just like individuals, businesses have bills to pay. A firm with sufficient liquidity is one that has enough assets available to cover its debt obligations. As an investor, this is Read More

Selling Costs As a Percentage of Sales Formula

When a company sells a product, there are almost always costs involved that reduce profits. There’s the direct cost of buying or manufacturing products it sells. In addition, indirect sales Read More

How to Pay for College with Pre-tax Dollars

Saving for college is a necessity if you want for your loved one to attend school without being saddled with thousands of dollars of debt by the time she graduates. Read More

Difference Between Insurance and Hedging

Insurance and hedging both reduce your exposure to financial risk, but they do so in different ways. Insurance typically involves paying someone else to bear risk, while hedging involves making Read More

Do Common Dividends Have an Influence on the Return of Equity?

A companys return on equity is a ratio calculated for analytical purposes that involves taking the net income after taxes and dividing by the average amount of stockholders equity during Read More

Difference Between a Private Real Estate Fund & a REIT

Real estate funds are a type of mutual fund that invests in real estate properties. These funds are managed by a fund manager and portfolio holdings tend to include domestic Read More

When a publicly traded company earns a profit, its profits are shared by investors who own company stock. Some companies distribute earnings directly to investors in the form of cash Read More

What Is Nonconsolidated Subsidiaries or Affiliated Companies?

Companies account for their investments in other corporations based on the size and nature of their stake. When one company has a controlling interest in another, it generally must include Read More

How to Calculate the Total Equity Value of a Merger

When two or more companies undergo a merger to become a larger company, the value and hence the total equity changes. Calculating the total equity value of the merger is Read More

Dividends’ Effect on Net Income

Many corporations return a portion of earned income to its stockholders in the form of a dividend. The dividend is a cash payment to shareholders of record. Payment of a Read More

Can Stockholders’ Equity Be Negative in an LLC?

An LLC, or limited liability company, is a business type somewhere between a partnership and a corporation. As with any business with stockholders, it has a value known as stockholders’ Read More

Return on Common Equity Versus Total Shareholder Return

By investing in a company, you become a partial owner. As an owner, you are entitled to a share of the company’s profits. Before investing in a company that seems Read More

The Relationship Between Actual Investments and Planned Investments

Investors can have both actual and planned investments based largely on logistical issues. For example, some financial securities are not very liquid, which means they cannot easily or quickly be Read More

Advantages of Investing in Emerging Markets

Emerging markets are generally defined as the markets in developing countries. Some, such as those in China and Brazil, are well on their way to parity with wealthier nations, while Read More

Financial ratios compare two or more items from financial statements to reveal a range of information useful to investors, lenders and managers. Conducting a financial ratio analysis relies on publicly Read More

When analyzing bonds, most investors like to employ the bond equivalent yield, or BEY, which measures the bond’s return based on its price, not its par value. Some investors, however, Read More

What Are the Advantages of a Change in an Owner’s Equity Statement?

Investors who analyze companies before buying stock must consider a number of different factors and measurements, many of which appear within a company’s financial statements. In particular, the statement of Read More

How to Calculate Terminal Value as a Growing Perpetuity in Excel

Spreadsheet programs like Microsoft Excel are ideal for use in calculating many financial variables, such as the rate of return or the present value. Any variable in an equation can Read More

Requirements for an IPO

An initial public offering (IPO) is the means by which a privately owned company goes public, or begins offering the public a chance to buy shares of ownership in that Read More

What Events Change Stockholders’ Equity?

When you research a company to invest in, the balance sheet gives you an idea of how much equity is available for the current shareholders. This figure can give you Read More

If you look at a typical stock chart, you may notice that the price rarely moves in a straight line, but rather oscillates in a zigzag-type pattern. Price charts provide Read More

Real estate investment trusts (REITs) can produce a profit for an investor in many ways. However, you may have to pay a higher rate of taxation on some earnings from Read More

The return from an investment such as stock shares or a mutual fund can be calculated in several ways. For many investments, dividends play a significant role in total returns. Read More

How to Calculate the Asset Correlations in Excel

The correlation between two or more assets is the measure of how much their performances are aligned. If the performance of two assets is similar, then it can be said Read More

Difference Between the Full Equity & Partial Equity Method

The full and partial equity methods are two of three main ways of dealing with the problem of producing accounts when one company has invested in another company. The third Read More

What Is a Profit and Loss Sheet?

Corporations, which are publicly-owned, are required by the U.S. Securities and Exchange Commission, or SEC, to periodically release financial statements, allowing investors to measure the financial health of a company. Read More

Can Shareholder Equity Be Negative?

Shareholder equity is a key way of measuring how much a company is worth. It’s simply the difference between assets and liabilities. If liabilities are higher than assets, the shareholder Read More

Education Requirements of a Database Administrator

The demand for qualified database administrators who can analyze, organize and store computer data is slated to increase as the demand for Internet database connectivity and security increases, reported the Read More

How to Calculate the Percentage Change in Profit for Accounting

When researching potential investments, one financial metric to consider is the percentage change in the company’s profits. A growing company should display an increase in profits, while a company that Read More

What Are the Advantages & Disadvantages of a Financial Ratio Analysis of a Firm?

To help identify potentially profitable investments, an investor must understand the financial position of a company or firm. When making lending and underwriting decision, a financial institution must have an Read More

Net Assets to Total Assets Ratio

Financial analysts typically use financial ratios to evaluate companies and compare them to others. Ratios evaluate how well a company deploys capital, how fast it turns over inventory, and dozens Read More

Difference Between Expected Rate of Return vs. Rate of Return

The two types of return that matter most for investors are the expected rate of return and the actual rate of return. Understanding the difference is critical for an investor Read More

Dividends as a Percentage of Net Income

There are a lot of different ways to invest and one of the ways focuses on dividends. Many investors like dividends because these are payments an investor receives regardless of Read More

Can I Determine the Cost of Capital From an Annual Report?

The cost of capital of a company is used for figuring out if it is earning a return at a rate above its cost of funds. The rate of return Read More

What Is SAG in Accounting?

In accounting, SAG stands for selling, administrative and general expenses. These are a company’s non-production costs of doing business — in other words, operating expenses not directly related to producing Read More

What Is Unfunded Liability in Accounting?

In accounting terms, an unfunded liability is a future financial obligation without sufficient assets designated for paying that obligation. Private companies and organizations can incur unfunded liabilities, but they’ve become Read More

Does a Net Loss Reduce Retained Earnings?

Understanding how the balance sheet and income statement interrelate will give you a better understanding of accounting, along with new tools for analyzing investments. One key topic to understand is Read More

Tangible Asset Coverage Ratio

Tangible assets consist of real and fixed property — such as land, buildings and machinery — plus current assets, which include inventory and receivables. A tangible asset coverage ratio is Read More

What Are the Treatments for Net Loss with No Retained Earnings?

Knowing your way around a company’s financial statements can improve your investing results significantly. The company’s filings with the Securities and Exchange Commission (SEC) are usually the best source of Read More

What Is a Provision for Income Taxes on the Income Statement?

The income statement is one component in a company’s financial statements. It is also known as the profit and loss account, and lists the revenues and expenditures a company has Read More

Relationship Between Net Income & Cash Flow

Knowing how to value a company is extremely beneficial, and can have very profitable outcomes. There is a lot of noise surrounding the stock market, with many books published, many Read More

There is a lot of information published on stocks every day, and becoming an expert in filtering through the noise will help your investment returns. There are only four financial Read More

To normalize net income is to recalculate the figure in a way that removes discrepancies that may make it hard to fairly compare the figure with that of another company. Read More

How to Determine Net Fixed Assets Ratio

Financial ratio analysis helps investors, lenders and others to understand the financial position of a company. Ratio analysis considers two or more items on a companys financial statements and their Read More

What Are the Two Main Characteristics of Intangible Assets?

Assets come in three main forms: tangible, intangible and monetary. The two main characteristics of an intangible asset are that it is not physical, meaning it exists as a legal Read More

What Kind of Asset Is Restricted Cash?

Restricted cash is a component of the cash and cash equivalents account reported on a company’s balance sheet. It refers to cash that has been set aside by management for Read More

What Is Unearned Revenue & Where Is It Reported in Financial Statements?

Unearned revenue is money that comes into a company before it provides a service or product to a buyer. It is a liability until the company earns it by delivering Read More

The Advantages and Disadvantages of Ethical Diversification Strategies

Ethical diversification strategies involve investing in sectors or companies that support some social, religious or environmentally-friendly standard. As much as a strategy can be proactive, it can also be defensive Read More

How to Find Ex-Dividend Dates of Stocks

When considering investing in a particular stock, many investors look to see if it pays dividends. A dividend is a payment from a company to the owner of its stock. Read More

How to Do the Variance of a Portfolio

Portfolios are a collection of financial instruments, perhaps including disparate assets such as bonds, futures, shares, and more. Investors invest in portfolios in order to diversify and thus avoid placing Read More

A List of Accounting Expense Items

There are a few types of financial statements. Each one contains different information. Knowing the types will give you an edge in researching investments. The income statement is the statement Read More

What Are the Treatments for Pledged Assets on a Balance Sheet?

Providing an asset to secure a loan lowers the interest rate the lender charges because it acts as a form of collateral in the event the borrower defaults. These assets Read More

List of Assets in Financial Accounting

Being familiar with accounting is almost a prerequisite to being a good investor. You have to know what each of the accounts means and how the different financial statements relate Read More

How to Buy an IPO Before It Goes Public

According to Hoovers.com, which tracks companies that have recently filed with the SEC to go public, 89 initial public stock offerings were filed with the Securities and Exchange Commission during Read More

Corporate mergers are common practice in the financial world. When two companies merge, one company often will take the role of subsidiary to a larger company. Some large companies have Read More

In the financial markets, a forward contract is one signed by two parties outlining an agreement of a transfer of an asset from one party to another. These contracts are Read More

If you have an investment portfolio, you will be aware that there are generally two types of investments that pay out dividends. The first type pays dividends to you in Read More

Gross margin, sometimes referred to as gross profit margin, is the amount of profit realized after the subtraction of cost of goods sold. Gross margin percentages differ between industries. For Read More

Does a Paid Dividend Belong on an Income Statement?

Stocks are generally valued on earnings. The earnings are reported on the income statement — the first financial statement most investment professionals look at. The income statement shows the revenue, Read More

How to Evaluate Financial Statements

Entering into an investment without sufficient research can spell financial doom. When contemplating an investment, evaluate the companys financial statements to attain an understanding of its fiscal stability. Each of Read More

Knowing your way around an income statement will help you considerably when researching stocks. You will be able to determine the earnings power of the company and figure out the Read More