Finance Term and Roles

RETURN ON ASSETS (ROA) Formula Description: You determine return on assets by dividing net profit by your total asset base. What Does Return On Assets Tell You?

Corporate finance is important to all managers because it allows a manager to be able to predict the funds the company will need for their upcoming projects and think about ways to organize and acquire those funds.

Debt is a burden that is implemented by those who own it. Debt is the punishment for any group or person that dedicates their work to only helping those in need. Debt can only be lifted by those with enough money. An employer helps an employee 's debt in exchange for work, a student 's debt is alleviated if the University grants a scholarship, a bank receiving a bailout from the government ; or a person/group giving money, donating money to something or someone else. The only way that there is no cost to the receiver, is if the money were given. Workers must work for there money, a student must succeed in school, and a donation must be to a certain thing and

One such metric used by security departments and many organizations to ensure capitol is allocated in the areas it will do the most good is known as return on investment (ROI). ROI looks at the total amount of capital expenditures for the budgeted item or project. Management can then assess whether the total cost of the system provides the necessary return on investment to justify the expenditure. For example, if a security department was installing a new employee badging system, management would look at the capital cost of the system to assess if it provides the necessary return on investment by preventing unauthorized access and protecting

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

It also helps in understanding the value of the business assets it owns and this can used to help you and other interested parties such as investors, creditors or shareholders to assess the worth of your business at a given moment.

A financial resource is like a bank loan or a mortgage they are when you receive financial assistants with paying for something like a car or a divorce. Paying for utilities is a type of an expense, when you have to pay for things like water, electrical, and heating. A debt is something when you owe money to another party after taking out a loan, debts you pay after a long period of time.

Debt is simply money that is owed, and it can be very dangerous to get into. Many people, even rich people can go into massive amounts of debt and be nearly unable to escape it and get all of their money paid back. Debt can include things like loans for credit cards and other things, such as loans taken out to pay for things that current cash reserves can’t pay for. A lot of celebrities have gone into debt, and I will be explaining one celebrity’s debt; Kanye West. On February 13th Kanye announced that he was approximately $53 million in personal debt.

Debt financing, by contrast, is cash borrowed from a lender at a fixed rate of interest and with a predetermined maturity date. The principal must be paid back in full by the maturity date, but

The ARR (Accounting rate of return) is the only method that compare the measure of profit over the life of a project to the amount of capital that must be invested to earn that profit. Once the ARR has been calculated, it is compared to the firm’s target return normally the organisation’s

This tells us what the company can do with what it has, i.e. how many dollars of earnings they derive from each dollar of assets they control. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; As Star River requires large initial investments it generally has lower return on assets.

Interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited or borrowed (Wikipedia).

Return on investment (ROI) measures the rate of return generated by an investment center’s assets (Jackson, Sawyers, Sweeney, & Anderson, 2008). ROI is broken down into two components margin and asset turnover. Margin is a measure of operating performance and asset turnover is a measure of how effectively assets are used during a period (et. al. 2008).

Debt is a financial instrument that is used to finance an organization by paying back borrowed capital with interest. Debt instruments are notes, loans, bonds, and debentures are used to pay for needs for an entity preferably in the short term. An advantage of good debt is the predictability of payments to

The definition of debt in the dictionary is, “something that is owed or that one is bound to pay to or perform for another” (Merriam-Webster). In the situation of financial stress, debt is owing significant amount of money to an organization or individual. In the United States economy, People can borrow money to pay for needs they cannot afford. This is usually for having a shelter in the form of a house or obtaining transportation in the