A partnership is a business that is owned by two or more people. Like sole proprietorships, many partnerships are small companies that have been formed when individuals pool their money and resources to form a bigger company. Partnership Characteristics Partnerships have characteristics comparable to those of sole proprietorships but may be structured differently in terms…
Interest Compounding
The easiest way to learn the concept of compounding interest is to work through a compounding scenario using interest compounded annually. Why is Compounding Interest Confusing? Compounding interest can be confusing because the interest rate is often stated as an annual rate but then is compounded over a shorter period of time. If compounding isn’t…
Compound Interest
What is Compound Interest? Compound interest is interest that is calculated on the principal sum as well as the previous amounts of accumulated interest. In essence, compound interest is interest that is paid on interest. Compound Interest and Principal If a business took out a loan for $3,000 for two years with conditions stating it…
Simple Interest
Simple interest is interest that is accumulated or earned on a principal sum. If the amount of the principal sum is unchanged from year to year, the interest per year will remain the same. Interest can be calculated using the formula below: Simple Interest Formula I = P x R x T I = Interest…
Time Value of Money
What is the Time Value of Money? The time value of money is the idea that the money you have now is worth more than the same sum in the future because of its potential earning power. Investors and the Time Value of Money Most investors would prefer to receive money today rather than the…
The Importance of Customers
The importance of consumers.
Market Research
For a business to excel in a highly competitive market it must learn to become adept at forecasting market demands for its products and services with some degree of accuracy. Market Research Firms Market research firms can play an important role in helping to collect, analyze and share pertinent market research with businesses that need…
Expert Opinions
Daryl F. Zanuck, head of 20th Century Fox, in 1946, predicted that “TV won’t be able to hold on to any market it captures after the first six months.
Forecasting the Future
What is Forecasting Demand? Forecasting is the art of estimating future demand by anticipating what consumers are likely to do under a given set of future market conditions. Why is Forecasting Challenging? Few products or services are easy to place accurate market forecasting upon. Products and services that are easy to forecast tend to be…