Asset-based financing is a method of raising money by taking out loans to pay for a project or business and using the assets involved in that project or business as collateral and/or to generate return. For example, if your business manufactures cars, you can take out loans to pay for the necessary materials and costs of production, using the car factory as collateral. After you sell the cars you’ve produced, you would use the profits to pay back your loans and pocket the remainder.
Archive for the ‘Daily Definition’ Category
Asset-Based Financing is…
Wednesday, August 5th, 2009A Direct Investment is…
Wednesday, August 5th, 2009A direct investment is the purchase or sale of a company’s stock through that company alone, without the intervention of a broker. This is done via a Direct Stock Purchase (DSP) or Dividend Reinvestment Plan (DRIP), where dividend income automatically goes to buying more stock. Basically, you deal with the company directly and eliminate the middleman.
A Market is…
Wednesday, August 5th, 2009A market is anywhere people come together to buy and sell things. At a farmers market, farmers and consumers come together to buy and sell produce, but markets can be exchanges for anything. Generally when we hear newspeople talk about “the market,” they are talking about the stock market – which refers to not only the physical trading floor of the NYSE but also online or electronic markets where people come together to buy and sell stocks.
A Tax Refund is…
Wednesday, August 5th, 2009A tax refund is money you get back from the government if you’ve paid more in taxes than you actually owed.
Value Added Tax is…
Wednesday, August 5th, 2009Value added tax is a tax levied on commodities after they go through production to reflect the increase in value. For example, a cake is made out of many ingredients, but the finished product sells for more than the sum of its parts, so the company selling the cake pays value added tax on this price increase. However, since sellers usually just hike up their prices to compensate for value added tax, it’s the consumers who really pay it in the end.
An Excise Tax is…
Wednesday, August 5th, 2009An excise tax is a tax on commodities made and sold within the same country (as opposed to the import tax on goods from other countries). For example: environmental taxes, and fuel taxes
Real Gain is…
Wednesday, August 5th, 2009Filing Status is…
Wednesday, August 5th, 2009Filing status is the category you fill out on your income tax return that determines the rate of your income tax (for example, a filing status of “single” will result in your paying more taxes than someone who has approximately the same income but files as “head of household”). There are five filing statuses: single, married filing separately, married filing jointly, head of household, and qualifying widow(er) with dependent child.
A Pay-Down is…
Wednesday, August 5th, 2009A pay-down is a partial payment of a debt. For example, if you make monthly payments on a new car, each one of those payments is a pay-down.