What is a Joint-Stock Company? A joint-stock company is a business that is owned by its investors. The shareholders buy and sell shares and own a portion of the company. The percentage of ownership is based on the number of shares that each individual owns. Shareholders can buy and sell shares and transfer shares between one…
What is Customer Bonding? Customer bonding is, just as the term implies, the process through which a company or organization makes connections with its customers. The goal of customer bonding is to develop a relationship and sense of community, including the customers so that they: Feel welcomed Are more likely to continue patronizing the company…
What are Switching Costs? Switching costs are costs that a consumer incurs from switching brands, products, services, or suppliers. Switching cost is also known as switching barrier. Understanding Switching Costs Switching costs commonly refer to the financial costs incurred by a consumer when they switch brands, products, services, or suppliers. However, it is important to…
What are Market Segmentation and Targeting? Market segmentation and targeting refer to the process of identifying a company’s potential customers, choosing the customers to pursue, and creating value for the targeted customers. It is achieved through the segmentation, targeting, and positioning (STP) process. Overview of the STP Process As mentioned earlier, STP stands for segmentation,…
What are Business Operations? Business operations refer to activities that businesses engage in on a daily basis to increase the value of the enterprise and earn a profit. The activities can be optimized to generate sufficient revenues to cover expenses and earn a profit for the owners of the business. Employees help accomplish the business’…
What is Amortization of Intangible Assets? In this article, we will discuss the amortization of intangible assets. Intangible assets refer to assets of a company that are not physical in nature. They include trademarks, customer lists, goodwill, etc. Hence, they are not composed of parts or materials with a defined benefit or life span, which…
What is Risk Transfer? Risk transfer refers to a risk management technique in which risk is transferred to a third party. In other words, risk transfer involves one party assuming the liabilities of another party. Purchasing insurance is a common example of transferring risk from an individual or entity to an insurance company. How It…
What is a Succession Event? A succession event, in economic terms, is the occurrence of an event wherein one of the two parties involved take on the legal powers, assets, or obligations of the other party. Succession events usually occur when business or legal circumstances require the party involved to pass on its obligations, assets,…
What is the Annualized Income Installment Method (AIIM)? The Annualized Income Installment Method (AIIM) is a method used to calculate the amount of taxes payable by a business during a tax year. Taxes are typically paid in installments quarterly, but some businesses do not report uniform cash flows throughout the year. Many businesses are seasonal,…
What is an Appraisal Management Company (AMC)? An Appraisal Management Company (AMC) is a company that works independently as a middleman between real estate appraisers and lenders. In other words, they are a management company that will act on behalf of appraisal users. AMCs include a group of licensed or certified appraisers. The appraisers are…
