What is Simple Interest? Simple interest is a calculation of interest that doesn’t take into account the effect of compounding. In many cases, interest compounds with each designated period of a loan, but in the case of simple interest, it does not. The calculation of simple interest is equal to the principal amount multiplied by…
What is a Vendor? A vendor refers to an individual or company that sells something to another individual or entity. Vendors can be utilized at different spots in the supply chain, and with multiple occurrences throughout. The term vendor can encompass retailers or suppliers broadly with what is often a component in a larger product….
What is the Vacancy Rate? The vacancy rate is how many available dwellings are on the market for rent within a specified geographic region. The number is presented as a percentage and is often defined within a city, town, province, or state. Vacancy rates can also apply to commercial/office space (storefronts or high-rises) and reflect…
What is Voodoo Economics? Voodoo economics is the term George H.W. Bush used to describe U.S. President Ronald Reagan’s economic policies before becoming his vice president. Bush invented the term, which was deemed derogatory, in 1980. The former vice president was of the opinion that Reagan’s supply-side policies were not only going to fall short…
What is a Vulture Capitalist? A vulture capitalist is a type of investor that scavenges off distressed companies for profit, like a vulture scavenges off the dead bodies of animals. (Vulture capitalists typically receive criticism because their tactics involve the targeting of individuals and/or companies who are already experiencing financial difficulties!) Hedge funds and private…
What is Inventory Turnover? Inventory turnover, or the inventory turnover ratio, is the number of times a business sells and replaces its stock of goods during a given period. It considers the cost of goods sold, relative to its average inventory for a year or for any set period of time. A high inventory turnover generally means…
What is a Divestiture? A divestiture (or divestment) is the disposal of company’s assets or a business unit through a sale, exchange, closure, or bankruptcy. A partial or full disposal can happen, depending on the reason why management opted to sell or liquidate its business’ resources. Examples of divestitures include selling intellectual property rights, corporate…
What Is a Corporation in Business? A corporation is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating a business for profit. A corporation, by definition, exists as a separate legal structure from its owners and is recognized under state laws. This separation provides limited liability protection, meaning the corporation…
