Financial Calculations

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Capital gains are the profits an investor makes on certain types of investments. Real estate, precious metals, collectibles, bonds, mutual funds, stocks and options are investments for which a person can earn capital gains, according to About.com.

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  • How do you calculate net purchases?

    Q: How do you calculate net purchases?

    A: To calculate net purchases, add all purchases and freight-in, or shipping, together to get gross purchases and then subtract purchase discounts, purchase returns and allowances from gross purchases. This process yields the net purchase total, according to Simplestudies.
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  • What is the formula for total revenue?

    Q: What is the formula for total revenue?

    A: According to AmosWeb, total revenue is calculated by multiplying the price received from the product times the quantity of the product sold at that price. Total revenue is usually depicted as a total revenue curve with it being directly related to marginal revenue and average revenue.
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  • What does "net price" mean?

    Q: What does "net price" mean?

    A: The term "net price" refers to the cost of something minus the price of anything that lowers the total dollar value a consumer actually pays, according to U.S. News & World Report. The term is most commonly used by colleges and universities.
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  • What is the importance of financial accounting?

    Q: What is the importance of financial accounting?

    A: Financial accounting is important because it provides an organization's stakeholders with business statements, allowing them to know if the organization is making or losing money. This information is essential in determining if a company is able to maintain profitability, according to Accounting-Careers-Guide.com.
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  • What does "net cost" mean?

    Q: What does "net cost" mean?

    A: The net cost of a good or service is the total cost of the product minus any benefits gained by purchasing that product, according to AccountingTools. It differs from the gross cost, which is just the total cost of a product.
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  • What items make up the cost of goods sold?

    Q: What items make up the cost of goods sold?

    A: The items that make up the cost of goods sold are the materials, equipment and labor that go into creating the goods. Many marginal cost items affect the actual cost of producing and selling items.
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  • What are hedging techniques?

    Q: What are hedging techniques?

    A: Hedging techniques are strategies and tactics employed by investors to reduce financial risk. Pairing, short-against-the box, exchange-traded funds, futures and options are the most commonly used to predict and reduce financial risk.
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  • What is a petty cash transaction?

    Q: What is a petty cash transaction?

    A: Petty cash transactions are small business expenses that are paid out in cash, according to About.com. Frequently a company has a small amount of cash on hand that is used to pay for small purchases or reimburse employees for company purchases made out of pocket. Petty cash expenditures are recorded in the company's financial records to keep track of how the money is utilized.
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  • How much do teens spend on clothes per year?

    Q: How much do teens spend on clothes per year?

    A: According to Statistic Brain, as of 2014, total spending by American youths aged 13 to 19 years is approximately $258.7 billion annually. According to Business Insider, teens spend 40 percent of their money on clothing. If that's correct, it translates to $103.48 billion spent by teens annually for clothes.
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  • How do you calculate sales revenue?

    Q: How do you calculate sales revenue?

    A: To calculate sales revenue, verify the prices of the units and the number of units sold. Multiply the selling price by the number of units sold, and add the revenue for each unit together.
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  • What is the indirect method for preparing a cash flow statement?

    Q: What is the indirect method for preparing a cash flow statement?

    A: The indirect method for preparing a cash flow statement is used to show the uses and sources of cash by a business. It is the preferred method by most companies because the information required to prepare it is fairly easy to assemble from accounts that a company usually maintains. However, the indirect method does not clearly show how cash flows through a business, which is shown in the direct method.
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  • What is profit maximization?

    Q: What is profit maximization?

    A: In economics, profit maximization refers to the process by which a business assesses the price and output of goods in order to ensure the greatest profit. During the assessment, businesses will determine the expense of fixed and variable costs during production in order to ascertain financial viability. There are two main ways a business achieves this total revenue-total cost and marginal revenue-marginal cost.
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  • What is analytical research?

    Q: What is analytical research?

    A: Analytical research is a specific type of research that involves critical thinking skills and the evaluation of facts and information relative to the research being conducted. A variety of people including students, doctors and psychologists use analytical research during studies to find the most relevant information. From analytical research, a person finds out critical details to add new ideas to the material being produced.
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  • What does a financial analyst do?

    Q: What does a financial analyst do?

    A: Investopedia explains that a financial analyst gathers data and analyzes the financial foundation of a business or industry. The daily tasks of a financial analyst depend on his level of experience. Most junior analysts are responsible for gathering data, while senior analysts are responsible for making connections in the industry. Junior analysts are promoted to senior analysts after a minimum of three years in the industry.
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  • What are financial resources?

    Q: What are financial resources?

    A: Business Dictionary lists financial resources as funds that are available to a business for spending. These funds may come in the form of money, liquid securities or credit lines.
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  • How is a sales commission calculated?

    Q: How is a sales commission calculated?

    A: A sales commission is calculated using the commission structure agreed upon between the owner or manager of a business and a salesperson. This commission structure is sometimes received as a one-time payment. However, it can also be received as a recurring commission over the life of the sales account.
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  • What is the importance of international finance?

    Q: What is the importance of international finance?

    A: International finance is important for determining exchange rates, comparing inflation rates, investing in foreign debt securities, ascertaining economic conditions in other countries and investing in foreign markets, according to For Dummies. The International Financial Reporting Standards (IFRS), adopted by more than 120 countries as of April 2011, are an important backbone of international finance and offer numerous benefits, according to Investopedia.
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  • What is the inventory turnover ratio?

    Q: What is the inventory turnover ratio?

    A: The inventory turnover ratio is a formula that displays how many times inventory is replaced over a period of time by dividing cost of goods sold over average inventory. This ratio is used to identify the efficiency of inventory management within a company.
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  • What is the formula for total fixed cost?

    Q: What is the formula for total fixed cost?

    A: The formula for total fixed cost is fixed costs plus variable costs multiplied by quantity equals total cost, or FC +VC(Q)=TC, according to Education Portal. Fixed costs are costs that do not change based on aspects such as production levels, where variable costs change based on production.
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  • Is inventory a current asset?

    Q: Is inventory a current asset?

    A: The U.S. Division of Trading and Markets defines current assets as the resources that are reasonably expected to be sold for cash or other receivables within one calendar year. If the inventory for a business falls under this category, then that inventory could be considered a current asset. Morningstar lists inventories among other common line items in the category of current assets, which also include accounts receivable, short-term investments and cash or cash equivalents.
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  • What is the currency of Brazil called?

    Q: What is the currency of Brazil called?

    A: The currency of Brazil is called the Real, according to the XE website. The Real's currency code is BRL and its symbol is R$. The minor unit of the Real is the Centavo, which amounts to 1/100 R$.
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