What are the advantages and disadvantages of horizontal integration?

June 30, 2024 No Comments

A: A company that seeks to expand through a horizontal integration can achieve economies of scale, economies of scope, increased market power or market share, reduction of production costs, reduction of competition and increases in other synergies. However, a company that decides to integrate horizontally

What are the advantages and disadvantages of listing on the Nasdaq versus other stock exchanges?

June 30, 2024 No Comments

A: The primary advantages for a company of listing on the Nasdaq exchange are lower listing fees and lower minimum requirements to qualify for a listing. The fact that Nasdaq features all-electronic trading is considered an advantage by many traders as well. The main disadvantage

What are the benefits of credit ratings?

June 30, 2024 No Comments

A: Credit ratings are an important tool for borrowers to gain access to loans and credit cards. Good credit ratings allow people to easily borrow money from financial institutions or public debt markets. At the consumer level, banks will usually base the terms of a

What are the best metrics to evaluate a telecommunication company?

June 30, 2024 No Comments

A: In fundamental analysis, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), debt/equity and free cash flow are important pieces of a company’s financials. Evaluating any stock also requires specific knowledge about the company’s sector and industry, as well as knowledge of the forces that

What are the differences between absorption costing and variable costing?

June 30, 2024 No Comments

A: Absorption costing includes all costs, including fixed costs, in figuring the cost of production, while variable costing only includes the variable costs directly related to production. Companies that use variable costing keep overhead and other fixed-cost operating expenses separate from production costs. The fixed

What are the differences between amortization and impairment?

June 30, 2024 No Comments

A: Amortization and impairment both relate to the value of a company’s intangible assets, which are reported on the balance sheet. Intangible assets include goodwill, or value within the company’s name and reputation itself. Also, patents, trademarks and copyrights are given a value and reported

What are the differences between comprehensive income and other comprehensive income?

June 30, 2024 No Comments

A: In financial accounting, income is broken down in a multitude of ways, and firms have some latitude on when to recognize and report their earnings. To compensate for this, the Financial Accounting Standards Board (FASB) has firms collect and report information that helps to

What are some examples of successfully executed leveraged buyouts?

June 30, 2024 No Comments

A: In finance, a buyout refers to the purchase of a company’s voting stock in which the acquiring party gains control of the target company. A buyout can be funded with a combination of cash or debt. Buyouts that are disproportionately funded with debt are

What are some examples of the main types of capital expenditures (CAPEX)?

June 30, 2024 No Comments

A: A capital expenditure (CAPEX) is the expenditure of funds or assumption of a liability in order to obtain physical assets that are to be used for productive purposes for at least one year. Depreciation is used to expense the fixed asset over its useful

What are some examples of ways that sensitivity analysis can be used?

June 30, 2024 No Comments

A: Sensitivity analysis is an analysis method that is used to identify how much variations in the input values for a given variable will impact the results for a mathematical model. Sensitivity analysis can be applied in a number of different disciplines, including business analysis,

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