Author: John

LTV/CAC Ratio: Definition, Calculation, Example, Formula, Benchmark

When it comes to customer acquisition, there are many factors that businesses need to consider, including the cost of acquiring a new customer and the lifetime value of that customer. The LTV/CAC ratio is a metric used to measure the effectiveness and efficiency of a company’s customer acquisition strategy. By …

Bad Debt Expense: Definition, Journal Entry, Formula, Accounting, Meaning

Companies often encounter challenges related to the timely collection of receivables. Usually, uncertainties arise when customers, for various reasons, fail to fulfill their payment obligations. In addressing these uncertainties, companies must recognize a bad debt expense. What is Bad Debt Expense? Bad debt expense refers to the anticipated financial loss …

3 Statement Model: Definition, Examples, Importance, vs Discounted Cash Flow

Companies use various financial tools to forecast information. This information helps anticipate future outcomes, enabling informed decision-making, strategic planning, and efficient resource allocation based on anticipated business conditions. One of these tools is the three-statement model. What is the 3 Statement Model? The three-statement model is a core financial modeling …

Blended Rate: Definition, Calculation, Formula, Example

When it comes to loans and mortgages, a change in interest rates is not a very uncommon thing. This can happen due to several reasons such as economic factors, market trends, and policies of lending institutions. When this happens, the interest rate of your loan may also change. Blended rate …

Depreciable Asset: Definition, Importance, Types, Land

Depreciation refers to the reduction in an asset’s value over its life. In accounting, it is crucial to identify whether a company can depreciate a specific asset. Therefore, companies know what a depreciable asset is. What is a Depreciable Asset? A depreciable asset is a long-term tangible asset that experiences …

Shutdown Point in Economics: Definition, Example, Types, Meaning

It’s a very unfortunate event when businesses have to come to an end. Many reasons can lead a business to shut down, such as financial struggles, market saturation, or even natural disasters. Whatever the reason may be, business owners need to understand when it’s time to close their doors and …

Reneging on a Contract or Job Offer

When it comes to business deals and job offers, it is considered unethical to back out or renege on a contract after agreeing to its terms. This can not only damage businesses’ reputations but also have legal consequences. However, there are certain circumstances where reneging may be necessary or even …