Asset turnover tells you how well a company uses its assets to make money. The company owns assets that have value, like machines, buildings, or furniture. The company uses these assets to make the products or services it sells. Asset turnover is a number that shows how many times in a year the company uses…
An asset swap spread is extra money paid when swapping a risky bond. It’s spent on top of the average floating rate. The floating rate is what banks charge each other for loans. This benchmark rate is called the interbank market rate. The extra money, called the spread, compensates for the bond’s riskiness. Riskier bonds…
Assets under management means money. It’s how much hard cash and investments a person or company takes care of. We’re talking about stocks, bonds, real estate, and other things that have value. When you add up the value, you get the total assets under management. It’s not just about the Benjamins. Sure, assets under management…
Asset liquidity risk is like quicksand for your money. It’s a big problem that can swallow up businesses and investors faster than you can say, “Show me the money!” What the Heck is Asset Liquidity Risk? Here’s the deal. When you’ve got assets (stuff that’s worth money), you want to be able to turn them…
Asset stripping occurs when a company is bought and its assets—the valuable things it owns—are sold off quickly. The company that buys the other company does this to make money fast. They’re not interested in running the company for a long time. They just want to get as much cash as they can, as quickly…
Asset management is a fancy way of saying, “taking care of your stuff.” By stuff, I mean all the valuable things a person or company owns. These could be money in the bank, investments like stocks and bonds, real estate property, or even extensive equipment and machinery for businesses. The main goal is to make…
Asset inflation is when the prices of things like stocks, bonds, real estate and other investments go up a bunch. It’s different from regular inflation, which is when the prices of everyday things like food and gas increase. Asset inflation specifically looks at the rising prices of investment assets. Why does asset inflation happen? A…
Asset deflation is when the prices of things like stocks, real estate, and other investments go down. It’s the opposite of inflation, which is when prices go up. Asset deflation can happen for a bunch of different reasons, but it usually means the economy isn’t doing so hot. The Nitty Gritty of How Asset Prices…
Asset impairment is when something you own goes down in value. This could be because it got damaged, it’s getting too old, or someone who owes you money can’t pay you back. When this happens, you might have to write down how much that thing is worth in your financial statements. That’s asset impairment in…
Asset coverage measures how well a company can use its assets to pay off specific debts or financial promises. You know how sometimes you borrow money from a friend and promise to repay them? And to make them feel better, you say, “Hey, if I can’t pay you back with cash, you can have my…
