DEBT

Definition: Debt is a sum of money owed to a person or organization by another person or organization. It is a legally binding obligation to repay a debt at a specified time and interest rate. Types of Debt: Factors Affecting Debt: Impact of Debt: Debt Management: FAQs

Definition: Bad debt is an accounts receivable that is unlikely to be collected in full or at all. It is also known as uncollectible accounts or non-payment accounts. Causes: Types of Bad Debt: Impact: Management: FAQs

Credit analysis is the process of evaluating an individual’s credit history and current financial standing to assess their credit worthiness. It involves collecting and analyzing various factors, including: 1. Credit Reports:– Reports from all three credit bureaus (Experian, Equifax, TransUnion)- Contain information on payment history, credit utilization, and account activity- Provide a comprehensive view of […]

A sinking fund is a type of reserve fund used to accumulate money to cover future expenses or liabilities. It is often used to cover future costs such as pensions, mortgage payments, or for the construction of a future asset. Key features of a sinking fund: Purpose: To accumulate funds for a specific future expense. […]

Corporate debt restructuring is the process of modifying the terms of a company’s debt obligations to improve its financial standing and relieve financial distress. It involves altering existing debt agreements or issuing new debt to reduce debt service costs, extend maturities, or improve liquidity. Types of Debt Restructuring: Reasons for Debt Restructuring: Process of Debt […]

A hire purchase agreement is a contract between a seller and a hirer for the hire purchase of goods. Under this agreement, the hirer makes a series of payments to the seller over a specified period of time in exchange for the use of the goods. Key Features of Hire Purchase Agreements: 1. Ownership: The […]

A zombie is a term used to describe a fictional creature that is often described as dead but animated by a supernatural force. Zombies are typically depicted as mindless creatures that crave human flesh and attack anyone they encounter. They are often associated with horror and the dead. Origin: The concept of zombies dates back […]

Definition: Financial risk is the uncertainty of future financial outcomes. It is the potential for loss or decline in the value of an investment or portfolio. There are various factors that can affect financial risk, including market volatility, interest rates, inflation, and economic instability. Types of Financial Risk: Factors Affecting Financial Risk: Managing Financial Risk: […]

Definition: Funded debt is a type of debt that is backed by a specific asset or collateral, such as a loan secured by a mortgage on a house. The asset is used as security for the debt, and if the borrower defaults, the lender can seize the asset and use it to recover their losses. […]

Trade credit is a type of accounts payable financing that allows a company to purchase goods or services from another company without paying cash upfront. Instead, the buyer agrees to pay the seller in the future, usually within a specified period. Types of Trade Credit: Benefits of Trade Credit: Disadvantages of Trade Credit: Examples of […]