Involves formal written agreements with specific terms, including interest rates, payment schedules, and clauses for late payment or default. Well, we’re here to remove any confusion or complications around notes payable. Once you know how they work, you can leverage…

Profit is better than revenue when evaluating business success, as it reflects the actual financial gain after expenses. Revenue shows total income, but without profit, a business may struggle to sustain operations. The opposite of net revenue is gross revenue,…

Operating leverage is a measurement of how sensitive net operating income is to a percentage change in sales dollars. Typically, the higher the level of fixed costs, the higher the level of risk. However, as sales volumes increase, the payoff…

Looking closely at Gear, the investor can see that the entire change in ROE was due to an increase in financial leverage. This means the company borrowed more money, which reduced average equity. The investor is concerned because the additional…