When it comes to investments, whether it is a stock, bond, or any other security, there is some degree of risk. Every investment portfolio has its own degree of risk, and this is known as portfolio risk exposure. The higher the risk amount, the greater the potential losses that could …

To understand how much money a particular product or service contributes to paying down the fixed costs of the business, it’s essential to calculate the weighted average contribution margin. It is an aggregate figure, calculated by taking the contribution margin of each product or service in a given group and …

A manager’s check is a convenient, safe, and reliable way to pay large amounts of money relatively quickly. It is issued by the bank in its name and can be encashed by the bearer without having to go through the regular check-clearing process. The guarantee provided by the bank makes …

Pricing and costing have always been important factors in a business’s success. To ensure the prices are competitive, yet still provide enough margin to generate profit, many companies turn to target costing. Target costing is a management technique that involves setting prices based on market conditions. It helps businesses provide …

The stock market can be a complex and intimidating place for investors. One of the lesser-known terms used in stock trading is Theoretical Ex-Rights Price (TERP). The TERP is an estimate of what the price per share of stock will be after the rights issue has taken place. Rights issues …

Bank drafts are a common type of payment used by businesses and individuals. It is a written order from a bank or other financial institution, instructing the drawee to pay a specific person or entity a specified sum of money on demand. The recipient of the Bank Draft will receive …

The workforce is essential in many industries. Whether service- or product-based, businesses need employees in many areas. In manufacturing companies, these employees also help contribute during the production cycle. The work done by them falls under the definition of labor. It includes any effort, skill, and time employees put toward …

Structured finance is a type of financial engineering that involves the use of complex financial instruments to structure sophisticated transactions. It is used to manage risk, raise capital and facilitate asset transfers. Structured finance can involve the securitization of assets or other forms of debt financing. These structures are designed …

When it comes to payments, it is important to stay on top of any arrears. This means knowing if the payments are late or missed and being proactive in dealing with them. Late payments can cause a financial strain and can negatively affect credit ratings. It is important to keep …

Implicit costs are expenses that appear on a company’s balance sheet and represent the opportunity cost of using resources. Unlike explicit costs, which are actual out-of-pocket payments for goods or services, implicit costs do not involve any cash exchange. As such, they can be difficult to recognize and measure accurately. …