What is Netting? Netting is a process by which an exposure or obligation is reduced by combining two or more positions. The value of multiple positions is analyzed and offset, and eventually, the parties that need to be paid and pay are determined. Multilateral netting involves more than two parties. Netting is used for several…
What is Net-Net? Net-net is a term used for a company with a market capitalization that is less than the difference between the company’s current assets and total liabilities. The equation does not consider long-term assets, such as property, plant, and equipment (PP&E), and intangibles. Net-net investing is used with the underlying understanding…
What are the Pros and Cons of Solar Energy? What are the pros and cons of solar energy? Many people mistakenly believe that there aren’t any negatives related to solar power. But the truth is that solar energy, just like any other power source, comes with a number of trade-offs – both advantages and disadvantages….
What is a Universal Basic Income (UBI)? While it does not yet exist as a practical reality in the United States, the concept of a universal basic income – or UBI – is similar to the concept of minimum wage. Each individual receives an agreed-upon minimum income (basic income) with the intent that the income…
What are Non-Renounceable Rights? Non-renounceable rights are issued by the company offering the shareholders the option to purchase additional shares of the company, usually at a price lower than the market price. The rights can neither be transferred to other investors nor sold in the market. Non-renounceable rights lapse if not exercised. Non-renounceable rights are…
What are SMART Goals? Goals are part of every aspect of business/life and provide a sense of direction, motivation, a clear focus, and clarify importance. By setting goals, you are providing yourself with a target to aim for. A SMART goal is used to help guide goal setting. SMART is an acronym that stands for…
What is a Business Segment? A Business Segment (or a Strategic Business Unit) is a subsection of a company’s overall operations in which there is an established, separate product line. A business segment can be identified by the product(s) sold or services provided or by geographical locations that the company operates in. Senior…
What is Shareholder Primacy? Shareholder primacy is a shareholder-centric form of corporate governance that focuses on maximizing the value of shareholders before considering the interests of other corporate stakeholders, such as society, the community, consumers, and employees. The debate between a shareholder approach and a stakeholder approach has been going on for a long time….
What is a Non-Disclosure Agreement (NDA)? A Non-Disclosure Agreement (NDA) is a document that is exchanged between a prospective buyer and a seller in the initial stages of an M&A transaction. The document is exchanged after the prospective buyer shows interest in a company after looking at the teaser of the target. The objective of…
What is Trade Credit? A trade credit is an agreement or understanding between agents engaged in business with each other that allows the exchange of goods and services without any immediate exchange of money. When the seller of goods or services allows the buyer to pay for the goods or services at a later date,…
