Category Archives: Finance Knowledge

Comparative Advantage

This article describes Comparative Advantage, which is the term used to describe how one person, business, or economy, is able to outproduce one product or service compared to another person, business, or economy. Click on this post to learn about different types of comparative advantage, and to see an example of how it works in the real world.

The Accounting Cycle

The Accounting Cycle is a series of steps that businesses take to track transactions and consolidate financial information over a specific accounting period (month, quarter, year). The end result of is the production of accurate financial statements for that period and preparedness for the next accounting period. Read this article for more information.

Cost Accounting

One area of accounting is cost accounting, which focuses on internal reporting for the purpose of improving managerial decision making. This article includes a description of cost allocation, cost-volume-profit and the role of a double break-even!

Creating Financial Statements

A company’s financial statements give investors, managers, and other “users” a complete, honest look at its financial health. Finished financial statements follow a standardized format, letting investors compare different companies in the same industry apples-to-apples. Click here to learn about the components of a company’s financial statements.

Risk

Risk is one of the most important concepts in investing, economics, and personal finance, yet very few people really understand just how big a role risk plays in our everyday lives. Read this post to learn more about risk, and the role it plays in interest rates and psychology.

Property Rights

“Property Rights” usually refers to a set of fundamental rights giving citizens control over their own land, capital, and ideas. Property rights is the foundation of all free-enterprise economic systems. It is what allows people to profit from capital and ideas, without fear of seizure by the government or theft. Read this post to learn about different kinds of property rights, what weak property rights can do, and the ever growing field of intellectual property rights.

International Trade

International Trade is the system under which businesses, individuals, and governments trade goods and services. This exchange from many different National economies is what makes up the Global economy. Click on this article to read about the difference between international imports and exports, the benefits of international trade, why a country would want to restrict trading, and more!

Inflation

“Inflation” means that the general prices of goods and services goes up from one year to another. Click on this post to learn about the two methods used to calculate inflation (CPI and GDP Deflator), as well as how inflation impacts the economy.

Fiscal Policy

The way the government organizes taxes and their spending to influence the economy is called the Fiscal Policy. Click on this post to read about the difference between fiscal and monetary policy, the different kinds of spending a government can choose and how they manage growth and deficit.

Time Value of Money

The Time Value of Money is a literal phenomenon where overtime, the value of your money increases. Click on this post for an explanation of why this is the case, and to learn about how time value of money affects businesses and interest rates.