Investment has different meanings in finance and economics. In economics, investment is related to saving and deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments. In finance, investment is putting money into something with the expectation of gain, usually over a… [Read More]
Businesses are more than just what they produce and put out to the public. While the end goal is to provide a service or a product that will be consumed it takes a lot of input and support resources to achieve that end. Those resources are the assets owned by the company and they provide… [Read More]
A business (also known as enterprise or firm) is an organization involved in the trade of goods, services, or both to consumers. Business plan and Business model determine the outcome of an active business operation. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase… [Read More]
Stock, equity or share as used in finance represents a part ownership in a company. Ownership of a stock entitles the owner (stockholder or shareholder) with all the profits distributed in form of dividends in direct proportion to the amount of shares owned. For example, consider a hypothetical company that has issued 100 shares to the public. A shareholder that owns 10 shares of the company has claims to 10% (10/100) of all the profits distributed in form of stock dividends.
Value investing is an investment paradigm that derives from the ideas on investment that Ben Graham and David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis. Although value investing has taken many forms since its inception, it generally involves buying securities that appear underpriced by… [Read More]
In accounting, profit is the difference between the purchase and the component costs of delivered goods and/or services and any operating or other expenses.
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, “management of a household, administration”) from οἶκος (oikos, “house”) + νόμος (nomos, “custom” or “law”), hence “rules of the house(hold)”.
A market in economics is a place where goods and services are exchanged for money or other equivalent goods or services. Goods and services can range from everyday staples to luxury goods. An organized market where shares of companies are sold and bought is called the stock market
Generally, goods and services are the outcome of human or nature efforts. In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax. We satisfy our needs and wants by buying goods… [Read More]
A company is an association or collection of individuals people or “warm-bodies” or else contrived “legal persons” (or a mixture of both). Company members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, declared goals.
An investor is someone who allocates capital with the expectation of a financial return. The types of investments include, — gambling and speculation, equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc. This definition makes no distinction between those in the primary and secondary markets. That is, someone who… [Read More]
In modern economies, prices are generally expressed in units of some form of currency. (For commodities, they are expressed as currency per unit weight of the commodity, e.g. euros per kilogram. ) Although prices could be quoted as quantities of other goods or services this sort of barter exchange is rarely seen. Prices are sometimes… [Read More]
A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Conversely, a capital loss arises if the… [Read More]
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value. A debt is created when a creditor agrees… [Read More]
A balance sheet provides a snapshot view of a company’s assets, liabilities and equity at a given moment, showing the balance between income and expenditure. It is also known as a “statement of financial position.” When using a correct and precise balance sheet, a company’s owner can see what his company is worth, what he owns and what he owes all at a glance.
An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group. These advantages include an ability to: hire Professional investment managers, which may potentially be able to offer better returns and more adequate risk management; benefit from economies of… [Read More]
A security or financial instrument is a tradable asset of any kind. Securities are broadly categorized into: debt securities, equity securities, e.g. , common stocks; and, derivative contracts, such as forwards, futures, options and swaps. The company or other entity issuing the security is called the issuer. A country’s regulatory structure determines what qualifies as… [Read More]
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices (index, plural) track economic health from different perspectives.
An exchange (or bourse) is a highly organized market where (especially) tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.
A shareholder or stockholder is an individual or institution that legally owns a share of stock in a public or private corporation. Stockholders are granted special privileges depending on the class of stock.