Carriage and Insurance Paid (Shipping) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Operations, Project, & Supply Chain Management

What is Carriage And Insurance Paid?Carriage and Insurance Paid (CIP) is an Incoterm. It represents the situation where the seller delivers goods in his own country for transportation to the buyer in another country. Under a CIP agreement, the seller must purchase...

Capped Fund (Investments) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Capped Investment Fund?A Capped Fund is an investment fund that has an annual limit on the operating expenses that can be charged to shareholders. The limit is expressed as the ratio of total operating expenses divided by the average net asset fund. The...

Capitalization Rate – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Capitalization Rate?A capitalization rate, or cap rate, is used by real estate investors to evaluate an investment property and show its potential rate of return, helping the investor decide if she should purchase the property. The formula is: Net Income /...

Capitalization of Earnings – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is Capitalization of Earnings?Capitalization of earnings means that a company’s earnings are not distributed to owners; rather, they are maintained in the company for future use. As such, the earning are capitalized or become part of the company’s...

Capital Formation – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Capital Formation?Capital formation refers to the accumulation of capital goods, financial capital, and human capital. Economic Views of Capital FormationThere are two divergent view on the role of capital formation: Liberal economists: They think that capital...

Capital Asset – Explained

by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting

What is a Capital Asset?A capital assets is any element of capital, either of equipment or of production, that will be used as part of the production process of another good and will become part of the capital of a company. Capital assets are not destined for direct...

Report on the Observance of Standards and Codes – Explained

by TheBusinessProfessor | Feb 23, 2025 | Global Business, International Law & Relations

What is the Report on the Observance of Standards and Codes?The Report on the Observance of Standards and Codes is a report compiled by the World Bank and International Monetary Fund summarizing countries adherence to the internationally recognized standards and codes...

Recast Financial Statements – Explained

by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting

What are Recast Financial Statements?Companies adjust their financial statements in order to reflect the actual financial benefits earned by the company. This is known as recasting, and the adjusted statements are known as recast financials. Companies recast their...

Real Estate Mortgage Investment Conduit – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Real Estate Mortgage Investment Conduit?A Real Estate Mortgage Investment Conduit is a special purpose vehicle (entity), authorized by the Tax Reform Act of 1986, that holds a fixed pool of mortgages and issues multiple classes of interests in itself to...

Random Walk Theory (Stock Market) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is the Random Walk Theory?The Random Walk Theory or Random Walk Hypothesis is a financial theory that states the prices of securities in a stock market are random and not influenced by past events. It suggests the price movement of the stocks cannot be predicted...