What is CVP Analysis? Cost-Volume-Profit Analysis (CVP analysis), also commonly referred to as Break-Even Analysis, is a way for companies to determine how changes in costs (both variable and fixed) and sales volume affect a company’s profit. With this information, companies can better understand overall performance by looking at how many units must be sold…
How to Calculate Variance? The variance formula is used to calculate the difference between a forecast and the actual result. The variance can be expressed as a percentage or an integer (dollar value or the number of units). Variance analysis and the variance formula play an important role in corporate financial planning and analysis (FP&A)…
What are Monetary Assets? Monetary assets are assets that carry a fixed value in terms of currency units (e.g., dollars, euros, yen). They are stated as a fixed value in dollar terms even when macroeconomic factors, such as inflation, decrease the purchasing power of the currency. Dissecting the Term “Monetary Assets” Monetary assets are assets…
What is a Project Budget? The Project Budget is a tool used by project managers to estimate the total cost of a project. A project budget template includes a detailed estimate of all costs that are likely to be incurred before the project is completed. Large commercial projects can have project budgets that are several…
What is Capital Gains Yield (CGY)? Capital gains yield (CGY) is the price appreciation on an investment or a security expressed as a percentage. Capital Gains Yield Formula CGY = (Current Price – Original Price) / Original Price x 100 Capital Gain is the component of total return on an investment, which occurs as a result…
Guide to Equity vs. Fixed Income Both equity and fixed-income products are financial instruments that can help investors achieve their financial goals. Equity investments generally consist of stocks or stock funds, while fixed income securities generally consist of corporate or government bonds. Equity and fixed-income products have their respective risk-and-return profiles; investors will often choose…
What is Leveraged Finance? Leveraged finance is the use of an above-normal amount of debt, as opposed to equity or cash, to finance the purchase of investment assets. Leveraged finance is done with the goal of increasing an investment’s potential returns, assuming the investment increases in value. Private equity firms and leveraged buyout firms will employ…
What is SCQA? SCQA is an abbreviation that stands for Situation, Complication, Question, and Answer. The SCQA method is a framework used to structure information in a way that captures a reader’s attention. It is very important in business writing, as the reader is more likely to understand the text and agree with its message….
What is the Weighted Moving Average (WMA)? The weighted moving average (WMA) is a technical indicator that traders use to generate trade direction and make a buy or sell decision. It assigns greater weighting to recent data points and less weighting on past data points. The weighted moving average is calculated by multiplying each observation…
