When it comes to decision-making, whether for companies or investors, there are two figures they can use. These are the profits or cash flows of a company. However, some people tend to confuse the two and not be able to differentiate between them. Therefore, it is necessary to understand what …

What are Operating Costs? Operating costs are the expenses that relate to the maintenance and administration of the operations of a company or business. The operating costs of a company include its direct cost of goods sold and its overall operating expenses. Therefore, a company’s operating costs include its salaries …

There are various financial ratios that investors can use to evaluate a company and its performance. Most of these ratios that focus on the financial performance of a company consider its profits. Out of those, one of the primary ratios that investors can use is the Earnings Per Share (EPS). …

What is Normal Distribution? A normal distribution is a probability distribution that is symmetric about the mean. It shows that data near the mean occur more frequently than data that exists far from it. Graphically, the normal distribution resembles the shape of a bell curve. It is a prevalent distribution …

When it comes to saving money and investing it, there are various options that one may have. However, they need to evaluate all these options separately to identify which one’s the best for their needs. Among these options, two of the well-known choices are money market accounts and high yield …

What is Capital Budgeting? Capital budgeting is a process that companies or businesses use to evaluate projects or investments. Usually, these techniques relate to long-term projects that require heavy investments. When there is a long-term plan involved, companies need to use capital budgeting to evaluate whether it will be successful. …

What is Inflation? Inflation is a topic used in economics and other related fields. It describes the decline of the purchasing power of a given currency over time. Practically, most currencies around the world suffer inflation after a specific period of time. However, some currencies may also experience an increase …

Companies face various types of risk due to their nature. Therefore, they need an efficient risk management strategy to run successfully. Similarly, investors need to identify these risks before investing in a company’s equity or debt instruments. Among those risks, two risks often occur more, market and credit risk. What …

Inflation is a topic that comes from economics but relates to several other fields as well. Its definition also comes from economics. However, its definition may differ elsewhere, while the fundamental concept is the same. Inflation is quantifiable and measurable based on several indexes. However, before understanding how to calculate …

Investors expect high returns from their investment. They identify and invest in stocks that return the maximum possible returns. However, there are also risks associated with investments. Therefore, they need to manage their risks, as well. There are various investment strategies that they can use to achieve that. Among these …