Archive for the ‘Daily Definition’ Category

Recycling is…

Friday, August 21st, 2009

Recycling is when used products and materials are processed and made into new products or materials that can be purchased or donated and used again. This reduces waste and lowers the environmental impact of resource consumption.

Casualty Loss is…

Friday, August 21st, 2009

Casualty loss is the loss of property or money through damage, destruction, theft, or some other unforeseen calamity.

A Security Deposit is…

Friday, August 21st, 2009

A security deposit is a form of collateral, or item of value, that is pledged when making a financial agreement. It can be used for a range of business agreements, such as contracts, rentals, or purchases. For example, when you rent an apartment, you have to put down a security deposit, and if you do damage to the apartment or stop paying rent, the deposit is forfeited.

Cash Flow is…

Friday, August 21st, 2009

Cash flow is the amount of cash that is generated and used by a company over a certain period of time. It is calculated by adding any non-cash charges, such as depreciation expense, to the company’s net income after taxes.  This is why earnings and cash earnings are not always the same!

A Public Support Test is…

Friday, August 21st, 2009

A public support test is a tool used by the IRS to determine if a charitable organization is a public charity, i.e. a 501(c)(3). If the charity receives at least a third of its revenue from “the public,” it passes the public support test. The public here means regular people, the government, and foundations as opposed to a few powerful individuals or corporations.

A Tariff is…

Friday, August 21st, 2009

A tariff is a tax placed on imports.

A Barrier to Entry is…

Friday, August 21st, 2009

A barrier to entry is any obstacle or difficulty that prevents new firms from competing with established firms. For example, if one company has exclusive access to an important natural resource or a patent for some machinery that makes a manufacturing process much faster and cheaper, that’s considered a barrier to entry.

A Retailer is…

Friday, August 21st, 2009

A retailer is a person or organization (often a store) that sells commodities or products (aka things you want to buy) directly to the public, rather than to other companies for resale. For example, Target and Amazon are retailers, because they sell products directly to you for your personal use or consumption.

A Buyout is…

Friday, August 21st, 2009

A buyout is when a person or company buys the majority of shares, i.e. a controlling interest, in another company. This means they control the majority of votes at the annual meeting, can impact the board of directors, and influence other company decisions.

Fixed Interest is…

Friday, August 21st, 2009

Fixed interest is a classification that refers to any financial instrument in which the interest rate does not fluctuate or is not variable. For example, a bond’s price may change but the interest rate remains the same throughout the life of the bond.