Category archives: Dictionary

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Capital Appreciation

Capital Appreciation

What is Capital Appreciation?

Capital appreciation occurs when an asset increases in value over time. It’s calculated by taking the amount you paid for the asset originally and subtracting it from the asset’s new, higher value after appreciation.

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Revenue

Revenue

What is Revenue?

Revenue is the total amount of income that a business generates. It’s typically measured over a specific time period, such as a week, month, quarter or year. Revenue is often referred to as the turnover of a business.

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Liquidity

Liquidity

What is Liquidity?

Liquidity is how easy it is to convert an asset into cash. If you can sell an asset for cash easily, it’s considered to be highly liquid. If you might need several months or years to sell an asset, it has a relatively low degree of liquidity.

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Accounts Receivable

Accounts Receivable

What is Accounts Receivable (AR)?

Accounts receivable is the money that’s owed to a business by its customers or clients. In the world of business-to-business (B2B) trading, businesses regularly extend trade credit to their customers, allowing their customers to buy things on account rather than up front.

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Accounts Payable

Accounts Payable

What is Accounts Payable?

Accounts payable is money that a business owes to its suppliers and other creditors. When a business purchases goods or services using trade credit (a type of credit that’s extended by a supplier to a customer), the cost of this purchase is recorded in its accounts payable.

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