What Is a Goodwill Impairment? Goodwill impairment occurs when a company decides to pay more than book value to acquire an asset – then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of the asset is […]
Business
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What Is a Proforma Invoice? A proforma invoice is a preliminary bill of sale. It is sent to buyers in advance of a shipment or delivery of goods. The invoice will typically describe the purchased items and other important information. This includes items like the shipping weight and transport charges. […]
What is Commercial Property? Commercial property is real estate that is used for business activities. The designation usually refers to buildings that house businesses. But, it can also refer to land used to generate a profit. Also, it includes large residential rental properties. The designation of a property as a […]
What Is a Forward Contract? Forward contracts are private agreements between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation. However, its specific nature makes it particularly suitable for hedging. The forward contract […]
What Is the Average Collection Period? The average collection period (ACP) is the amount of time it takes for a business to receive outstanding payments. These are payments owed by its clients for goods or services in terms of accounts receivable (AR). Companies calculate the average collection period to make […]
What Is the Sustainable Growth Rate (SGR)? The sustainable growth rate (SGR) is the maximum rate of growth that a company can sustain without having to issue additional equity or take on new debt. The SGR involves maximizing sales and revenue growth without increasing financial leverage. Achieving the SGR can help […]