Cash crops were originally small acreage crops sold on commodity markets, such as wheat and cotton. Now, cash crops also refer to crops grown in developing nations for foreign trade, and illegal crops like marijuana and opium. Most industrial-sized farms now grow crops solely for sale on the global commodity market, chosen based on climate […]
Stockholm tested a Speed Camera Lottery in 2010, where fines from speeding drivers were used as a prize for drivers who followed the speed limit. Average speeds dropped by 22%, but the initiative was not implemented permanently. Good drivers in Stockholm can receive monetary rewards through a lottery system through winnings made of fines from […]
External money, such as foreign currency or assets, is held outside of a country’s economy and can accumulate wealth tax-free until converted. Investors can take advantage of international markets for returns and must track investments for potential returns and risks. External money refers to financial reserves considered outside the scope of any degree of responsibility […]
Digital money, also known as electronic money, is exchanged through electronic and encrypted means. It is backed by real dollars and is used for online purchases, direct paychecks, and ATM transactions. While concerns exist about unknown sources, digital money is widely accepted and is becoming increasingly popular in various industries. Have you noticed lately how […]
Cash flow systems monitor and ensure adequate cash flow for a business. Managing cash flow is crucial for paying bills, payroll, and suppliers. A good system considers accounts receivable and payable, and saving a reserve fund. Businesses can seek help from financial advisors or software. A cash flow system is a management system that allows […]
Cash flow formulas, including free cash flow, discounted cash flow, operating cash flow, and statement of cash flows, are used to calculate business liquidity. Free cash flow is the amount of cash available for distribution, discounted cash flow calculates future cash flows, operating cash flow deducts certain expenses, and the statement of cash flows includes […]
Accounts receivable is money owed for goods or services provided on credit, and cash collection is the process of redeeming it. Clear payment terms and instructions facilitate the collection process, and overdue accounts can be referred to collection agencies or courts. It’s important to consider the cost of recovering debt when dealing with overdue accounts. […]
Conditional cash transfers (CCTs) provide cash to poor households who meet specific program requirements. CCT programs have led to increased literacy rates, reduced child labor, and improved health outcomes. However, they can be difficult to manage and may limit parental choices. Conditional cash transfers (CCTs) are cash that are provided to poor households who meet […]
Petty cash is a small amount used for incidental expenses below a certain amount, usually around $50 USD in the US. It can be used for office supplies, meals, entertainment, and transportation. Documentation is required to avoid audit issues. It is usually managed by a company official and requires accurate documentation. Petty cash is a […]
Cash flow problems can arise from unpaid receivables, excess inventory, unexpected expenses, and overpaying employees. Accounts receivable and inventory management can help prevent these issues, while overpaying employees and unexpected expenses can be avoided through proper planning and budgeting. Cash flow problems can be quite distressing for business owners and managers, especially when the bills […]
Donating blood for money can be a source of income during economic hardship, but not all blood banks pay for donations. Donors must meet criteria and should not expect to get rich, as most facilities pay $20-$40 per donation, with a maximum of twice a week. Most places pay for plasma, not blood, and donors […]
Cash deposits are funds added to a checking or savings account, available for immediate withdrawal. They may also be required as security for services or rental items, with refundability depending on the agreement. Deposit slips are required, and waiting periods for checks may apply. Cash deposits are often required for renting apartments or other housing, […]
Cash flow tracking is essential for businesses to maintain financial stability and identify potential issues. It involves recording transactions in a cash journal to monitor revenue and expenses, and ensure positive cash flow. This applies to general operations and special projects. Cash flow is generally understood as the total amount of cash a business generates […]
Dead money is cash that is not generating interest. Examples include money in a checking account, cash reserves at home, and funds for general spending. To change the situation, consider switching to an interest-bearing checking account and setting up an emergency fund in an interest-bearing account. Use a debit card instead of carrying cash. Almost […]
“Cash in lieu” is a strategy used in transactions to compensate investors for fractional shares with a cash payment. It can be used in mergers, acquisitions, reorganizations, and stock splits. The compensation is based on the market value of the shares involved. “Cash in lieu” is a term used to identify specific types of trades […]
Cash flow hedge protects against variable cash flow risk caused by assets or liabilities generating income differently than expected. It uses derivative instruments like call or put options to limit exposure to risks like currency, price, or financial instruments. To qualify, the hedge must meet certain criteria. A cash flow hedge is a type of […]
Cash flow solutions are essential for maintaining day-to-day operations and can also be used during expansion or mergers. Examples include factoring, purchase order financing, lines of credit, loans, and raising prices. Payment modes such as electronic fund transfers and credit/debit cards are also used. Cash flow is essentially the amount of cash flowing in and […]
CFROI is a valuation model that determines an investment’s price based on the current state of cash flow, with the return needing to exceed the corporation’s internal hurdle rate. While some support the strategy, others believe external factors must also be considered. Also known as CFROI, the cash flow return on investment is a type […]
Accrual and cash accounting are two different methods of recording financial transactions. Accrual generates accurate historical records, while cash accounting is easier to use and requires fewer monthly inputs. Companies with $5 million USD in annual sales must switch to accrual accounting. The accrual basis and the cash basis are two different types of accounting […]
The cash conversion ratio helps businesses understand if revenue generated from production is sufficient to cover expenses. It is calculated by dividing cash flow from sales by production costs and earnings before taxes. A high ratio indicates profitability, while a low ratio may require changes to reduce waste and increase sales. Investors can also use […]
