What are Trading Instruments? Trading instruments are all the different types of assets and contracts that can be traded. Trading instruments are classified into various categories, some more popular than others. They range from equities and forward contracts to indices, currencies, and more. The Most Popular Trading Instruments Popular trading instruments usually see high trading…
What is Intellectual Capital? Intellectual capital refers to the value of a company’s collective knowledge and resources that can provide it with some form of economic benefit. It’s also used to identify a firm’s intangible assets and divide them into meaningful categories. The Three Branches of Intellectual Capital Intellectual capital is broadly summarized into three…
What is an Interim Statement? An interim statement refers to a financial statement that covers a period of less than a year. Interim financial statements portray the financial performance of a company over a short period of time. Publicly traded companies are required to release interim statements on a quarterly basis, providing investors with updates…
What is a Wage Expense? Wage expense refers to the cost incurred by an organization to compensate employees and contractors for work performed over a specific time period. Wage Expense vs. Salary Expense The difference between wages and salaries is often poorly understood. Understanding the difference between wage expense and salary expense allows an analyst…
What is a Wrap Account? A wrap account refers to an investment account that is managed by a broker for a flat annual fee. The flat annual fee, which ranges from 1% to 3% of assets under management (AUM), covers all expenses related to managing the account, such as administration, commission, management expenses. Understanding a…
What is a Go-Shop Period? A go-shop period is a provision within a mergers and acquisitions (M&A) agreement where the target company is permitted to seek out competing offers even after receiving a purchase offer from the acquirer. The period generally lasts up to two months. Understanding the Go-Shop Period A go-shop period allows the…
What are Golden Handcuffs? Golden handcuffs are financial inducements and benefits (typically deferred) given to certain employees to encourage them to remain with the organization for a longer period of time. Understanding Golden Handcuffs Golden handcuffs are a type of employee retention tool and are commonly used for: Senior management Employees with specialized skills High-performing…
What is the Internal Growth Rate (IGR)? The internal growth rate (IGR) refers to the sales growth rate that can be supported with no external financing. As such, the company is funding its operations solely from retained earnings. A company’s maximum internal growth rate is the highest level of business operations that can continue to fund…
What Does Underperforming Mean? In a general sense, underperforming refers to performing poorly or unsatisfactorily in comparison to expectations or when evaluated against a certain standard. For example, one can perform poorly by failing an exam at school (or receiving a score below the class average), indicating an underperformance compared to the rest of the…
What is an Intermediate Good? An intermediate good refers to partially finished goods that are then used as an input ton the production of other goods that become final goods. Intermediate goods are an integral part of the production process, and as such, they are also known as producer goods. When used in the production…
