finance
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Leverage Ratios: Understanding Financial Risk & Debt
A leverage ratio is any kind of financial ratioFinancial Analysis Ratios GlossaryGlossary of terms and definitions for common financial analysis ratios terms. Its important to have an understand
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Understanding Leverage Effect Measures: Quantifying Business Risk
Leverage effect measures aim to quantify how much business risk a given company is currently experiencing. Business risk refers to the revenue variance that a business can expect to see, and how sensi
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Leverage in Finance: Strategies, Types & Risks
In finance, leverage is a strategy that companies use to increase assets, cash flows, and returns, though it can also magnify losses. There are two main types of leverage: financial and operating. To
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Levelized Cost of Energy (LCOE): Definition & Calculation
The levelized cost of energy (LCOE), also referred to as the levelized cost of electricity or the levelized energy cost (LEC), is a measurement used to assess and compare alternative methods of energy
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Letter of Guarantee: Definition, Purpose & How It Works
A Letter of Guarantee refers to a written commitment granted by a bankTop Banks in the USAAccording to the US Federal Deposit Insurance Corporation, there were 6,799 FDIC-insured commercial banks
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Understanding Lending Ratios: A Guide for Credit Analysis
Lending ratios, or qualifying ratios, are ratios used by banks and other lending institutions in credit analysis. Financial institutions assign a credit score to borrowers after performing due diligen
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Lender of Last Resort: Role & Function in Financial Stability
A lender of last resort is the provider of liquidity to financial institutions that are experiencing financial difficultiesChapter 11 BankruptcyChapter 11 is a legal process that involves reorganizati
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Lehman Brothers: The Collapse of a Financial Giant
Lehman Brothers’ stock was selling at $86 a share in February 2007, giving the company a market capitalizationMarket CapitalizationMarket Capitalization (Market Cap) is the most recent mark
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Understanding LBOs: A Guide for Buy-Side Professionals
This article is specifically about LBOs on the buy-sideBuy-SideInstitutional asset managers, known as the Buy Side offer a wide range of jobs including private equity, portfolio management, research.
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Kuwaiti Dinar (KWD): History, Value & Key Facts
Kuwaiti Dinar is the legal tender of the State of Kuwait, an oil-rich nation in the Middle East that is surrounded by Iraq and Saudi Arabia. The dinar is divided into 1,000 “fils.” &n
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Know Your Client (KYC): Definition, Importance & Compliance
The Know Your Client (KYC) or Know Your Customer (KYC) is a process to verify the identity and other credentials of a financial services user. KYC is a regulatory process of ascertaining the identity
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Key Performance Indicators (KPIs): Definition, Examples & Importance
Key Performance Indicators (KPIs) are metrics used to periodically track and evaluate the performance of a businessCorporationA corporation is a legal entity created by individuals, stockholders, or s
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Key Currencies: Definition, Importance & Global Impact
Key currency is a currency that does not fluctuate too broadly, helps in setting exchange rates, and supports global transactions. The term “key currency” can also be used to define promin
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Keepwell Agreement: Definition, Purpose & Benefits
A keepwell agreement is an arrangement initiated between a parent company and one of its subordinate businesses. The parent company promises that it will provide the subsidiary with all the financing
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Understanding the 'Keep and Pay' Bankruptcy Strategy
“Keep and Pay” refers to a type of bankruptcyBankruptcyBankruptcy is the legal status of a human or a non-human entity (a firm or a government agency) that is unable to repay its outs
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Understanding the Justified P/E Ratio: A Deep Dive
The justified price to earnings ratio is the price to earnings ratio that is “justified” by using the Gordon Growth Model. This version of the popular P/E ratio uses a variety of underlyin
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Understanding Junior Tranche Debt: Definition & Implications
A junior tranche is an unsecured debtCost of DebtThe cost of debt is the return that a company provides to its debtholders and creditors. Cost of debt is used in WACC calculations for valuation analys
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Understanding Junior Securities: Risks and Implications
A junior security is a security that ranks lower in priority and seniority when contrasted against other securities. It typically comes with a lower priority claim against the assets and incomes of th
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Understanding Junior Equity: Risks and Returns
Junior equity refers to the equity or shares issued by a company that ranks below other shares or stocks issued by the same company. The stock issued is said to be subordinate to other stocks issued b
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Jumbo CDs: Higher Rates & Deposits Explained
A jumbo CD is similar to a conventional CD although the former generally requires a higher deposit and accrues interest at a higher rate. A CD is a certificate of deposit that is offered by banks for
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Dividend Payout Ratio (DPR): Understanding & CalculationThe Dividend Payout Ratio (DPR) is the amount of dividends paid to shareholders in relation to the total amount of net incomeNet IncomeNet Income is a key line item, not only in the income statement, ...
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International Travel During COVID-19: Risks & Cost Considerations...
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Greenfield Investment: Definition, Advantages & ExamplesIn economics, a greenfield investment (GI) refers to a type of foreign direct investment (FDI)Foreign Direct Investment (FDI)Foreign direct investment (FDI) is an investment from a party in one countr...
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Down Payments: A Comprehensive Guide to Understanding and PlanningPreparing for a big-ticket purchase? Be sure to learn about down payments beforehand. It’s pretty rare to buy a house, car, wedding ring, or any type of expensive item in all-cash without...