The balanced scorecard is a tool that was first created in 1987 at Analog Devices, by Arthur Schneiderman (source). The balanced scorecard is a set of four measures that are directly linked to a organization’s strategy. The four measures are “financial performance”, “customer knowledge”, “internal business processes”, and “learning and growth”. The “financial performance” measure …Continue reading "The balanced scorecard and how can it help you meet your objectives"
I recently listened to a rather interesting episode of the NPR podcast, Planet Money. Through a Freedom of Information Act request, NPR received a report from 2000 entitled Life After Debt. At the time, it was estimated that with the current budgetary surpluses, the US federal government would have the national deficit paid off in the year …Continue reading "How long have we had a national debt?"
Today, I am going to try to define a suspense account. A suspense account is an account in the general ledger used to temporarily carry receipts, disbursements, or discrepancies until it can be analyzed and classified. The suspense account allows you to record a payment when you don’t know what the payment is meant for. An example would …Continue reading "What is a suspense account?"
This is a topic that I had to read up on a little. I definitely do not have any experience with the it. When a house is listed on the market, the seller goes into an agreement with a real estate broker. The real estate agent who is working with the seller is an employee …Continue reading "How is a real estate commission paid?"
Today’s business term is “high ratio mortgage”. A high ratio mortgage is a mortgage of over 80% of the value of the property being mortgaged. Put in other words, it is when the borrower is putting down 20% or less, as a down payment. Often, the borrower is going to have difficulty getting such a loan …Continue reading "What is a High Ratio Mortgage?"
In our current economic conditions, it is important to understand interest rates. If you do not understand what the actual cost of borrowing of lending money is, you could be cheating yourself out of profits. Let’s start by defining nominal interest rates. The nominal interest rate is the market interest rate before an adjustment for …Continue reading "What is the difference between a real interest rate and a nominal interest rate?"
In these modern times of electronic trading and credit default swaps, it sometimes feels hard for the average person to figure out where the economy is going. There are a number of economic indicators that the average person can try to wrap their head around, such as international trade and construction spending. Well, in Alan …Continue reading "What can men’s underwear tell us about the state of the economy?"
Today, we are going to be looking into the world of international finance. The London Interbank Offer Rate (LIBOR) is an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market (source). The LIBOR is fixed on a daily basis by the British Bankers’ Association. The BBA polls …Continue reading "What is the London Interbank Offer Rate (LIBOR)?"
I’ve been working on doing a lot of research lately for a paper and I figured that I would share some of my findings. The question du jour is how many computers are sold, per year. This was an unusually difficult thing to find overall data for. I did find one source, though. I compiled …Continue reading "How many personal computers are sold per year?"
When a company makes a profit, it is its obligation to return that profit to its shareholders. In the case of a younger company, the company might want to reinvest its profits back into the firm but that is because it hopes to maximize future returns for the shareholders. When the company pays part or …Continue reading "What is a dividend and how is it paid?"