Financial Calculations

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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 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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  • How do you calculate per capita income?

    Q: How do you calculate per capita income?

    A: The U.S. Census Bureau calculates per capita income by dividing a geographic area's total income from the past 12 months by the total population of all ages living in that geographic area. Only income received by people over 15 years old is counted, notes the U.S. Department of Commerce.
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  • What is net monthly income?

    Q: What is net monthly income?

    A: Net monthly income refers to the paycheck employees receive from their employers. Employers deduct taxes and Social Security contributions before creating checks for their employees.
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  • How many pennies are in $1 million?

    Q: How many pennies are in $1 million?

    A: There are 100 million pennies in $1 million. Since there are 100 pennies in each dollar, multiplying 100 pennies per dollar times $1 million yields 100 million pennies.
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  • How can one live cheaply?

    Q: How can one live cheaply?

    A: There are many ways to live cheaply. Before you spend any money, ask yourself if you really need the thing you are considering purchasing. Before shopping, write down all the items you really need and stick to the list. Doing so will help you save a lot of money and live much more frugally,
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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 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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  • How do you calculate interest expense?

    Q: How do you calculate interest expense?

    A: Interest expense is calculated as the interest rate multiplied by the amount of the outstanding principal of the debt. Defined by Investopedia, interest expense is the cost incurred by an entity on borrowed funds.
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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 definition of "compound interest"?

    Q: What is the definition of "compound interest"?

    A: Compound interest is a financial term used to describe the process where the interest earned on a principal investment over a set period of time is added to the principal amount. The interest payable for the following periods is recalculated on the sum of the original investment and the previous interest earned. The word "compound" refers to the magnified effect that this method has on an investment's growth potential.
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  • How much does it cost to buy a star?

    Q: How much does it cost to buy a star?

    A: The cost to buy a star ranges from $19.95 to $50 and higher, depending on the specific package chosen. Certain star packages include medallions while others include a commemorative plaque. It is also possible to name the star specifically for a particular person.
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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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  • What are capital gains?

    Q: What are capital gains?

    A: 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 food cost percentage?

    Q: How do you calculate food cost percentage?

    A: StarChefs explains that food cost percentage is figured by taking the total beginning inventory cost plus purchases minus the ending inventory costs; then dividing that number by food sales.
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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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  • 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 a profit sharing plan?

    Q: What is a profit sharing plan?

    A: A profit sharing plan gives employees a percentage of the profits the company earns each year. These funds are put into an investment account for the employees.
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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 an economic continuum?

    Q: What is an economic continuum?

    A: An economic continuum is a method of categorizing parts of the economy, starting with those parts closest to the natural environment and flowing to those parts furthest away from it, according to About.com Geography. More developed countries have longer continua.
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  • How do you calculate late fees?

    Q: How do you calculate late fees?

    A: The Bureau of the Fiscal Service, a division of the U.S. Department of the Treasury, provides a monthly compounding interest calculator. This online calculator allows people to automatically determine the amount of monthly compounding interest owed on payments made after the payment due date.
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