When the supplier allows delayed payment, they are effectively extending financing to the company they trust, and this credit becomes a source of working capital for the company to spend elsewhere. For small businesses and startups, trade credit may be the only financing available to the company; thus, suppliers know to keep a close eye on their accounts receivable, and on the companies that hold credit with them. Pick Suppliers Carefully When opening a business, you must pick suppliers not just for the physical products they can offer, but also for their performance record and their terms of trade credit....

Critical illness insurance is purchased and paid for separately from normal health insurance. You may find that it is offered as part of a full healthcare package from your employer or by the same companies that offer other standard health plans. Alternate name: critical care insurance Some critical illness plans are very limited and may only cover a small handful of illnesses, whereas others can cover you for a vast range of ailments or illnesses....

Learn about earnings per share and how you can use the ratio to evaluate a stock. Definition of Earnings Per Share Earnings per share is the ratio used to indicate how much profit a company makes per share, using the average number of outstanding shares (the number of common stock currently held by stock owners). Investors use EPS to help them determine an investment’s value. If a corporation has high earnings per share, each share has a higher potential to create returns for an investor....

Managers can’t use the money to give themselves raises, increase dividends, or lower prices. They must use it to help the firm produce greater future gains and grow profits. How Does Financial Capital Work? There are three main types of financial capital in the business world: DebtEquitySpecialty Each type sources funding differently, but all can help a business grow. Debt Capital The first type is debt. Companies receive capital now that they pay back with interest....

Example of Jurisdiction in Lawsuits Picture a retail business owner being sued by a customer who suffered an injury in their store. The plaintiff must commence their action in a court that is appropriately located and before a judge who is authorized to adjudicate the specific claims. Types of Jurisdiction Jurisdiction is broken down into two prongs: personal jurisdiction and subject matter jurisdiction. In order for jurisdiction to be proper, both prongs must be satisfied....

Income and spending are positively correlated—meaning as income increases, so does spending. Conversely, lifestyle deflation refers to a reduction in spending. Alternate name: Lifestyle creep As an example, you start your first full-time job in an entry level role. Your starting salary is $35,000. You make coffee at home every day and treat yourself to the occasional coffee-shop latte. After six months, you earn a well-deserved promotion and a raise that brings your net pay to $50,000....

In the most basic definition, margin trading occurs when an investor borrows money to pay for stocks. Typically, the way it works is your brokerage lends money to you at relatively low rates. In effect, this gives you more buying power for stocks or other eligible securities than your cash alone would provide. Your account, including any assets held within it, then serves as collateral for that loan. The catch is that the brokerage isn’t going in on this investment with you, and it won’t share any of the risks....

It’s important to review multiple plans before deciding which plan to buy, or if you’ll buy one at all. You can only buy Medicare Part D if you also have either Medicare Part A and/or Medicare Part B. You must have both Part A and Part B to join a Medicare Advantage plan that offers prescription drug coverage. Not all Medicare Advantage plans offer drug coverage. How Does Medicare Part D Work?...

Learn more about what net advantage to leasing means and how to calculate it. Definition and Example of Net Advantage to Leasing Net advantage to leasing looks at the financial advantages to consumers and businesses of leasing an item instead of buying it. You can calculate the potential benefits of leasing by comparing the net present value of leasing an item with the net present value of purchasing it....

Open enrollment applies to employer-sponsored health insurance and coverage purchased from a government Marketplace. The open enrollment process can differ by benefit sponsor. Some open enrollment processes require you to take action every year, while others only need your input when you must add, change, or eliminate a benefit. Employers that only offer one health plan might not extend an open enrollment period. Open enrollment doesn’t apply to the U....

The term “quiet quitting” emerged on TikTok in the summer of 2022. In one viral video, user @zaidleppelin (formerly @zkchillin) described the practice as “not outright quitting” but “quitting the idea of going above and beyond.” “You’re still performing your duties, but you’re no longer subscribing to the hustle culture mentality that work has to be your life,” he said in his video. Quiet quitting has roots in the Chinese social movement tangping (lying flat)....

Learn how share turnover works, how to calculate it, and what it means for you. Definition and Examples of Share Turnover Share turnover measures a stock’s liquidity, or how quickly it can sell shares on the open market. Share turnover compares the total number of shares issued by a company to the number of shares traded during a certain period. As an example, let’s compare a large corporation to a small company....

You must generally have an income of between 100% and 400% of the federal poverty level for your family size to qualify for the premium tax credit. For tax years 2021 and 2022, the 400% limit is temporarily eliminated. But in general, bigger credits go to people with lower incomes. Here’s where the “advance” part comes in. If you qualify, the health insurance marketplace will estimate your premium tax credit amount for the year....

Several factors can contribute to the financial trends among the millennial generation, who are now well into adulthood, including how their income compares to their expenses. Let’s look in more detail about average millennial incomes in different demographics. Average Millennial Income The exact definition of the millennial generation can vary as there is no official definition. Millennials as defined by Pew Research are those born between 1981 and 1996, or those who were ages 26 to 41 in 2022....

The corporate default rate measures the percentage of issuers in a given fixed-income asset class that failed to make scheduled interest or principal payments in the prior 12 months. For instance, if an asset class had 100 issuers and two of them defaulted in the prior 12 months, the default rate would be 2%. The default rate can also be dollar-weighted. This means the dollar value of defaults is measured as a percentage of the overall market....

Understanding the difference between the gross rate of return and the net rate of returns can help you assess your investment portfolio. Learn how to use these numbers to be a smarter investor. Definition and Examples of Gross Rate of Return Your gross rate of return is your profit or loss on an investment, expressed as a percentage. This rate is often calculated once per year, in which case it would be called the annual rate of return....

Operating leverage is how fixed operating costs for things like facilities and equipment are used to generate revenue, usually expressed as a percentage of total costs. Leverage ratios measure the financial and operating leverage in a business. Financial leverage ratios compare the debt of a business to other financial criteria. Debt includes bonds payable, leases, lines of credit, and loans payable. Not all liabilities—for example, accounts or dividends payable—are considered debt....

Alternate names: commercial policy, international trade policy Trade policies can be aimed at a number of issues related to importing and exporting, such as foreign retaliation, jobs, or tariffs; or they may focus on protecting intellectual property, setting standards that promote collaboration and reduce trade barriers, or establishing trade agreements and trade laws. For example, in the U.S., the Export Trading Company Act (ETCA) enables U.S. firms to work together to reduce export costs, increase exporting efficiency, and better compete in the global market, among other initiatives....

Understand what underweight in investing signals to investors, why it matters, and how to use this weighting to balance your investment portfolio. Definition and Example of Underweight in Investing An underweight investment is a type of investing recommendation that implies it’s best to reduce investment in a certain asset class or security. The recommendation is made according to how the investment is measured against a particular benchmark. Underweight investments have less of a percentage of a certain stock or sector than the benchmark they’re being measured against....

According to the EEOC, workplace harassment is illegal when either of the following conditions are met: If you don’t put up with the offensive and unwanted actions, communication, or behavior, you could lose your job.The behavior is severe and pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive. Examples of Harassment Here are some examples of workplace harassment: Unwelcome sexual advancesOffensive jokes, stories, or name-callingAny kind of abusive behavior, including threats of violenceOffensive drawings or pictures...