Data Sources in Financial Modeling Collecting and using the right data sources in financial modeling is crucial to the success of financial analysis. Financial modeling requires gathering and analyzing lots of information; the collection of data is a crucial step in creating a financial model. There is a wide range of data that must be used…
What is a Consolidation Model? A Consolidation Model is constructed by combining the financial results of multiple business units into one single model. Typically, the first worksheet of the model is a summary or consolidation view that shows the highest-level figures (monthly and yearly revenues, profits, costs, productivity rate, etc.) in the form of tables,…
What is an Earnout? An earnout is a risk allocation mechanism for the acquirer wherein the purchase price is contingent on the “future performance” of the target company. The acquirer pays a majority of the purchase price upfront, at the time of closing the deal, and the remainder is contingent on the performance of the…
What is the Financial Industry Regulatory Authority (FINRA)? The Financial Industry Regulatory Authority (or FINRA) is a non-governmental organization that acts as a self-regulatory organization for securities firms that operate in the United States. The goal of FINRA is to protect investors by safeguarding the integrity of the financial markets. Foundation of the Financial Industry Regulatory…
What is an Adhesion Contract? An adhesion contract, also known as a “boilerplate” contract or a “standard form” contract, is an agreement between parties whereby one party (the one with a higher bargaining power) sets out all or most of the terms of the contract. The other party (the one with a weaker bargaining power)…
What is the Norwegian Krone (NOK)? The Norwegian krone is the primary currency of Norway, and it is regulated by the Norges Bank, the country’s central bank. The term “krone” is a Norwegian term that means “crown” in English. The krone is subdivided into 100 øre, which came into use electronically beginning in 2012. Norwegians…
What is a Notary? A notary, also called a notary public, is a person authorized to witness the signing of legal documents, usually concerned with deeds, estates, licenses, power of attorney, affidavits, and trusts. As a publicly commissioned official, a notary is tasked with verifying the authenticity of documents, and they serve as impartial witnesses…
What is a Notice of Assessment? A Notice of Assessment (NOA) is a statement issued by the Canada Revenue Agency (CRA) to Canadian taxpayers at the end of a tax year. The statement details the amount of income tax that the taxpayer owes the CRA, the amount of tax refund, tax credits, tax deductions, and…
What are Non-Tariff Barriers? Non-tariff barriers are trade barriers that restrict the import or export of goods through means other than tariffs. The World Trade Organization (WTO) identifies various non-tariff barriers to trade, including import licensing, pre-shipment inspections, rules of origin, custom delayers, and other mechanisms that prevent or restrict trade. Developed countries use non-tariff…
What is Normal Profit? Normal profit is an economic term that refers to a situation where the total revenues of a company are equal to the total costs in a perfectly competitive market. It means that the company makes sufficient revenues to cover the overall cost of production and remain competitive in its respective industry….
