Posts published in “FINANCE”

In a corporate context, zombies are companies that earn just enough money to continue operating and service the interest on their debt, but cannot pay down the principal.

Known as "Century Bonds," these 100-year instruments represent the ultimate vote of confidence in an organization’s permanence.

Bonds are essentially "IOUs" issued by entities to raise capital. When you buy a bond, you are lending money to the issuer for a set period in exchange for regular interest payments (coupons) and the return of your principal at maturity.

Decentralized Finance (DeFi) represents a shift from traditional, centralized financial systems—like banks and stock exchanges—to peer-to-peer finance enabled by decentralized technologies.

CAGR is not a true return rate in the sense of what happened in any specific month or year; rather, it is a representational figure. It describes the rate at which an investment would have grown if it had grown at a steady rate each year and the profits were reinvested.

An Accretion/Dilution analysis is a staple of M&A modeling used to determine whether a proposed merger or acquisition will increase (accrete) or decrease (dilute) the combined company's Earnings Per Share (EPS).

Raising capital is a pivotal milestone for any business, whether it is a garage-based startup or a multinational corporation looking to expand. The model a company chooses depends heavily on its growth stage, industry, and how much control the founders are willing to surrender.

A 3-Statement Model is the cornerstone of corporate finance and investment analysis. It links the Income Statement, Balance Sheet, and Cash Flow Statement into a single, dynamic financial engine where a change in one cell flows through the entire model.

The Pyramid of Financial Models is a conceptual framework that organizes financial forecasting tools based on their complexity, purpose, and interdependency.

Working capital—the difference between your current assets and current liabilities—is essentially the "fuel" that keeps your business running. While typically used for day-to-day operations like payroll and rent, it can be a powerful tool for funding expansion when managed strategically.

Business equity is considered worthless when the claims of creditors and senior investors exceed the total value of the company’s assets. In financial terms, this is often called "negative equity."

In business and finance, Yield on Cost (YOC) is a metric used to measure the current return of an investment relative to its original purchase price.

Invisible TAXes are financial burdens imposed by governments that are not explicitly stated on a price tag or a paycheck. Unlike sales tax, which is calculated at the register, these costs are baked into the price of goods or the structure of the economy, making them difficult for the average person to detect.

Currency hedging is a financial strategy used by businesses and investors to protect themselves against the volatility of foreign exchange rates. When you operate internationally, a sudden change in the value of a currency can turn a profitable deal into a loss overnight.

The Federal Reserve (Fed) meetings, particularly those of the Federal Open Market Committee (FOMC) which sets the benchmark interest rate, are incredibly important to businesses around the world for several interconnected reasons.

Days Sales Outstanding (DSO) is a crucial financial metric that measures the average number of days it takes for a company to collect cash from customers after a credit sale has been made.