Business is war.
A counterparty is someone on the other side of a deal. It’s who you do business with when you make an agreement or transaction. Banks, companies, and people can all be counterparties. Imagine you’re a big company that sells stuff to stores. Each store you sell to would be your counterparty. They’re the other side…
The cost of risk is what a business has to shell out to keep on top of all the risky stuff it faces. You’ve got your expected costs, and then there are direct and indirect losses that can hit you from the risks you choose to keep around, the work you do to keep those…
Cost of Goods Sold, usually called COGS for short, is a really important idea in business. It has to do with how much money a company has to spend to make the stuff it sells. COGS is a key part of figuring out how much profit a company makes. What is COGS exactly? COGS means…
Cost of carry is the amount of money it costs to hold onto something over time. This something could be any type of asset, like gold, wheat, stocks, or really anything with value that a person or company owns. People often just call this the “carrying cost”. When you own an asset, there are costs…
Cost inflation happens when stuff gets more expensive to make. Maybe the ingredients to make something – like the sugar and flour to bake cookies – suddenly cost a lot more money than they used to. Or maybe the workers who make the stuff need to get paid more, so the company has to raise…
Cost accounting is a type of management accounting. It looks at all the money a company spends to make and sell its products. Cost accountants keep track of budgets and what the company pays. They compare the two to see if there are any differences. Why Cost Accounting Matters Cost accounting is essential because it…
Credit risk becomes much more dangerous when multiple problems hit at once. This danger has a special name: correlated credit risk. It happens when a company or person who owes money starts having trouble paying exactly when the things they offered as backup security also lose value. Consider mortgage loans during tough economic times. People…
A market correction happens when stock prices or other investment values drop from their recent high points, but not as severely as during a complete bear market crash. These price drops typically range between 10% and 20% from the previous peak. Corrections temporarily pause the market’s upward movement, letting prices adjust to more reasonable levels….
Corporate valuation determines how much a company is worth by looking at how much money it might make in the years ahead. Companies make money through different ways – they pay dividends to shareholders, earn profits from their business, and generate cash from their operations. Investors and financial analysts use various methods to figure out…
Corporate finance deals with how companies handle their money and make significant business decisions. It includes everything from buying other companies to raising money for new projects. Companies use corporate finance to grow, become more efficient, and make more money for their owners. What Companies Do with Their Money Buying and Selling Companies Companies often…
