A triple bottom line is when a company takes its environmental, social, AND financial performance into account to assess its overall performance. It takes the idea of a double bottom line (which considers the company’s social impact) one step further to include its environmental impact.
Archive for the ‘Other Grow’ Category
Net Profit is…
Wednesday, October 6th, 2010Net profit is the amount a company makes (or loses) after taking its expenses into account. You can figure out net profit easily by subtracting a company’s total expenses from its total revenue. For example, if Company X has a total revenue of $1,000 in May, but spent $500 to produce the revenue, the net profit would be $500.
A 401(k) is…
Wednesday, October 6th, 2010A 401(k) is a retirement account that you don’t have to pay taxes on right away (the technical term is “tax-deferred”). These accounts are generally sponsored by employers, who can use them as a substitute for a traditional pension plan. Unlike a pension plan, which is managed and paid for entirely by the employer, a 401(k) acts as a personal retirement plan. Employees can contribute up to 15% of their salary every year (but no more than $11,000 a year for people under 50, and $12,00 for people over 50), which will not be taxed until they withdraw the money.
The interest, investment earnings and employer contributions (the employer can decide to pitch in to the account, if they want) are also not taxed until the employee withdraws the money. If the money is withdrawn before retirement age (currently 59.5 years old), the account holder faces an early withdrawal penalty fee.
Arbitrage is…
Wednesday, October 6th, 2010Arbitrage is a trading technique in which an investor (or sometimes a computer program) finds the same instrument (like a stock) offered at a lower price in one market and a higher price in another. The investor then buys the instrument at the lower price and immediately sells it in the other market for a higher price.
Prudential Turns Veterans’ Death Benefits Into Benefit For Prudential
Wednesday, September 15th, 2010Large companies have an obligation to their shareholders, but what happens when that puts them at odds with their obligation to the families of fallen soldiers?
- Records obtained through the Freedom of Information Act show that for the past 10 years, Prudential Financial has been withholding lump-sum death benefits from the families of fallen U.S. soldiers.
- In a verbal agreement with a Veterans Administration director in 1999, Prudential was given permission to issue “retained-asset accounts” to survivors rather than pay out the full amount due to them. According to original contract terms set with the company in 1965, verbal agreements aren’t enough to stand up in court.
- Prudential keeps those “retained assets” in its corporate general account, where they have earned the company as much as $500 million in interest. These funds are not insured by the FDIC, meaning that if the company went bankrupt, all of the money due to surviving families would disappear.
Facts & Figures
- Prudential pays survivors an interest rate of 0.5% on money held in retained-asset accounts
- These retained-asset accounts have earned Prudential a profit of 4.2%
- 90% of survivors request lump sum benefits from Prudential
- In June 2010, Prudential had $662 million in money due to survivors in its general account
Best Quote
“Until today I actually believed that the families of our fallen heroes got a check for the full amount of their benefits. This came as news to me.” – U.S. Secretary of Defense Robert Gates
Ford Gives The U.S. Hope
Wednesday, August 4th, 2010Ford reports an exceptionally strong first half of 2010 and causes optimism for the U.S. auto industry.
- Ford’s second-quarter earnings were much stronger than expected and the company is on track for “solid profits” in 2010.
- Ford plans to discontinue its Mercury brand and sell Volvo to China’s Geely in the 3rd quarter because it wants to focus on mass marketing Ford and Lincoln brands.
- Ford was the only large U.S. automaker to avoid bankruptcy in 2009, and is therefore in greater debt than GM and Chrysler.
- Ford paid back 7 billion dollars of debt in the 2nd quarter (now $27.3 billion in debt) and plans to continue debt reduction.
Facts & Figures
- Second-quarter net profits were $2.6 billion, compared to $2.26 one year ago.
- Ford revenue increased by $4.5 billion to $31.3 billion.
- This is the 4th consecutive quarter that Ford has reported profits.
Best Quote
“We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions.” -Alan Mulally, Ford Motor Co., Chief Executive
The Housing Market Is Still Stalling
Tuesday, August 3rd, 2010Homes aren’t selling and construction on new homes is slowing.
- The stalling housing market can be attributed to global economic turmoil, falling stock prices, and slow labor markets.
- Signed contracts in May and June have fallen dramatically.
- Despite low mortgage rates, tighter lending standards are preventing buyers from getting a loan and purchasing a new home.
- The two major issues in the job market are that there are too many homes and not enough demand.
Facts & Figures
- An unprecedented number of homeowners owe more than their homes are worth.
- Demand for mortgages is at a 14 year low.
- Last week, the average rate on a 30-year fixed-rate mortgage was 4.57%, which is the lowest its been since 1971.
Best Quote
“The sellers think the market’s coming back. They’ve tacked on an extra 5 to 10 to 15%. The buyers aren’t going for it. It’s going to feel like a double-dip because sellers are going to have to lower their prices” – Jim Klinge, a real-estate agent in Carlsbad, California
Strong Quarter, Weak Economy?
Friday, July 16th, 2010Although second quarter reports look strong, the economy may start to level out.
- Fear of an economic slowdown caused the stock markets to dip.
- Airlines are expected to make their first annual profit since 2007 due to fuller planes and higher fares.
- Stronger Asian economies are increasing exports, which helps struggling U.S. shipping companies.
- Despite all this, there has been poor job growth in the U.S in the past few months.
Facts and Figures
- New home sales fell 33%, and existing home sales fell 2.2%.
- Air shipments (mostly Asian exports) increased 30% from last year.
Best Quote
“Bottom line is earnings may hold up, but sales growth is slow and companies aren’t going to invest their record cash holdings until it improves.” – Howard Silverblatt, Senior Index Analyst of Standard & Poor
Young Upstart Divya Narendra on Starting Up on the Web
Thursday, July 15th, 2010
Divya Narendra is the 28 year old CEO and co-founder of SumZero, a website designed to help professional investors to share their investment ideas and network with one another. Running a business isn’t easy work, and so Divya spends his days generating new feature ideas, consulting with lawyers, forming partnerships with third parties, marketing the website, and yes, even handling the company’s bank accounts. He paused the work whirlwind for a moment to talk with TILE about starting up a start-up.
TILE: How did you get the idea for Sumzero?
Divya: The concept of SumZero was partly inspired by Wikipedia and partly by social networks such as LinkedIn. My co-founder and I wanted to create a universal, user-generated investment idea database consisting of rigorous investment recommendations whereby only professional hedge fund, mutual fund, and private equity analysts were allowed to contribute. This idea database is structured within a transparent social network enabling site members to connect over shared research, educational affiliation, prior employers, asset class expertise, etc.
TILE: What was one of your biggest challenges in starting the company?
Divya: One of the biggest challenges we’ve faced (and one that is faced by nearly all start-ups) has been building a team that is committed to growing SumZero.
TILE: Did you always want to go into business, or did you fall into this career path?
Divya: I first knew I enjoyed entrepreneurship when I was a junior in college. That year, I created a website aimed at connecting college students and alumni.
TILE: What’s in the future for you/ Sumzero?
Divya: We are currently working on raising capital to give SumZero the necessary financial resources to take the company to the next level. We hope to one day become the de facto platform for buyside analysts to exchange research.
TILE: What advice would you give your teenage self?
Divya: I would advise my teenage self to learn web programming to avoid having to hire others to do the job.
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