Accounting Basics

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Must Know Formulas for Cost Accounting

To reduce and eliminate costs in a business, you need to know the formulas that are most often used in cost accounting. When you understand and use these foundational formulas, you’ll be able to analyze [more…]

Important Terms and Principles Cost Accountants Should Know

Many accountants will tell you that cost accounting is the most difficult accounting subject to learn. That's because cost accounting has many terms that are not used in other areas of accounting [more…]

Avoiding Pitfalls on Cost Accounting Exams

Cost accounting is a great tool to improve the profitability in any business. It’s a critical subject that accounting students need to learn to be successful in their careers. However, some cost accounting [more…]

Key Costs Related to Managerial Accounting

In accounting, a cost measures how much you pay/sacrifice for something. Managerial accounting must give managers accurate cost information relevant to their management decisions. Here are several cost-related [more…]

Corporate Finance and the Role of Money in the World

Corporate finance is the study of relationships between groups of people that quantifies the otherwise immeasurable. Take a look at the role of money in the world to understand how this definition makes [more…]

What Makes Corporate Finance Unique

Corporate finance plays a very interesting role in all societies. Finance is the study of relationships between people: how they distribute themselves and their resources, place value on things, and exchange [more…]

How Corporate Finance Rules Your Life

Unless you’re in a rare minority who live “off the grid” (secluded and self-sufficient), nearly every aspect of your life is strongly influenced, directly or otherwise, by corporate finances. The price [more…]

What Exactly Are Corporations?

Corporations are a special type of organization wherein the people who have ownership can transfer their shares of ownership to other individuals without having to legally reorganize the company. This [more…]

What Are Depository Institutions?

Depository institutions come in several different types. Anytime you give your money to someone with the expectation that the person will hold it for you and give it back when you request it, you’re either [more…]

Insurance Companies and the Role They Play in Corporate Finance

Insurance companies are a special type of financial institution that deals in the business of managing risk. A corporation periodically gives them money and, in return, they promise to pay for the losses [more…]

Securities Firms and the Role They Play in Corporate Finance

Securities firms provide transaction services related to financial investments, which are quite distinct from the services provided by traditional depository institutions. However, many commercial banks [more…]

The Role of Underwriters in Corporate Finance

A special type of insurance company, called underwriters,deals only with other insurance companies. They analyze applications for insurance, determine the degree of risk and associated costs with issuing [more…]

The Differences between Hedge Funds and Mutual Funds

In corporate finance, funds come in two types — hedge funds and mutual funds — and although they both have the same fundamental principles, each type has some unique traits, processes, regulations, and [more…]

Financing Institutions and Their Roles in Corporate Finance

Financing institutions are kind of like banks in that they lend money, but they’re a bit different, too. First of all, they tend to give different types of loans than banks do. Secondly, they get their [more…]

U.S. Regulatory Bodies That Oversee Corporate Financial Institutions

Numerous regulatory bodies oversee corporate finances and financial institutions, and each one warrants its own book (in fact, the role and regulations encompassing each regulatory body span volumes of [more…]

Corporate Finance and the Federal Reserve and U.S. Treasury

A lot of people misconceive the actual role of the Federal Reserve. The actions of the Federal Reserve, however, are all quite transparent. Its reports are all available for public view, its actions are [more…]

What Capital Is in Corporate Finance

Everything that makes up a corporation and everything a corporation owns, including the building, equipment, office supplies, brand value, research, land, trademarks, and everything else, are considered [more…]

How Corporations Raise Money by Acquiring Debt

When a corporation needs money, one of the primary options it has available is to borrow some. Regardless of what the money’s for, when a corporation wants a loan, it starts by putting together a proposal [more…]

How Corporations Raise Cash by Selling Equity

Raising money by selling shares of equity is a little more complicated both in theory and in practice than borrowing money using loans. What you’re actually doing when you sell equity is selling bits of [more…]

What Kind of Jobs Are Available in Corporate Finance?

Corporate finance jobs aren’t just about crunching numbers all day in a hidden corner of a corporation’s financial department. A variety of employment opportunities are available within the corporate finance [more…]

There’s No Such Thing as a Trade Imbalance

At no point in a typical retail exchange do either you or the store owner have a trade imbalance, because the value of goods and money being exchanged are equal. [more…]

Purchasing Power Isn’t the Same Thing as Exchange Rate

The purchasing power of a nation’s currency refers to that nation’s ability to purchase goods. Usually purchasing power is measured using a list of necessities such as certain groceries, utilities, and [more…]

Eurobonds Aren’t Necessarily from Europe

The term Eurobonds refers to bonds in one nation that are denominated in another nation’s currency. So a Japanese-currency bond owned in Canada and subject to Canadian interest rates would be a type of [more…]

Interest Rates and Exchange Rates Have a Muddled Relationship

Particularly if you manage a multinational company, anticipating fluctuations in exchange rates can be an extremely important part of your company’s financial management success. So what influences exchange [more…]

Spot Rate Isn’t the Only Type of Currency Transaction

A number of things influence exchange rates, but in the end, how are exchange rates decided when a floating currency is involved? The process actually works a lot like buying stock. The organizations that [more…]

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