Revaluation vs Impairment Fixed assets such as machinery, tools, equipment are tangible long term assets that are not sold in the business, rather used in the production of goods and services. Fixed assets are recorded in the books at their cost price and are then frequently updated to show their true and fair market […]
Difference Between Allocation and Apportionment
Allocation vs Apportionment Allocation and apportionment are methods that are used to assign various costs to their respective cost centers. Allocation can only be used when the entire expense is directly related to one department and apportionment is used when proportions of the expense arise from a number of different departments. The article offers […]
Difference Between EBIT and EBITDA
EBIT vs EBITDA EBIT calculates the operating income once expenses are reduced from revenue without taking into consideration the tax and interest. EBITDA, however, does not take into consideration depreciation and amortization, in addition to tax and interest. EBIT nullifies the debt capital and tax rates used, and EBITDA nullifies accounting and financing effects […]
Difference Between Equipment and Materials
The key difference between equipment and materials is that materials form the actual product and are the parts, components, ingredients and raw materials that become a part of the product whereas equipment refers to the tools, machinery, devices that help create the product. Factors of production are the inputs in a manufacturing process that are used […]
Difference Between FCFF and FCFE
FCFF vs FCFE Taking a closer look at the terms ‘free cash flow for the firm’ (FCFF) and ‘free cash flow to equity’ (FCFE), the part ‘free cash flow’ is common for both terms. Free cash flow refers to the amount that is left over once the capital expenses are reduced from operating cash […]
Difference Between Trust and Fund
Trust vs Fund Trusts and funds are investment vehicles that hold assets of value. Since these terms are closely related, they are often confused to be the same. However, there are a large number of differences between a trust and a fund, how they are maintained, and who benefits from the investment returns. The […]
Difference Between Human Capital and Physical Capital
Human Capital vs Physical Capital There are a number of factors of production that are essential for the production process. One such factor of production is capital which may be in the form of cash, buildings, machinery, or even human skills and expertise. Human capital is the skills, knowledge, experience contributed by the firm’s […]
Difference Between Factor Cost and Market Price
Factor Cost vs Market Price There are a number of costs involved in the production of goods and provision of services. Many of these costs are related to the inputs into the production process, the taxes charged by the government, and other costs involved in operating in a dynamic business environment. All costs of […]
Difference Between Annuity and Perpetuity
Annuity vs Perpetuity Annuities and perpetuities are terms that are very important for any investor to know and understand since they both refer to types of financial payments made. An annuity is a repayment made periodically for a set period of time, whereas a perpetuity is a periodic repayment that has no end. Due […]
Difference Between Dividend and Capital Gain
Dividend vs Capital Gain The purpose of making an investment is to gain some sort of financial benefit at the time of maturity. When an investment in made in stocks, there are two types of financial returns that can be enjoyed by the investor; those are dividends and capital gains. However, capital gains can […]
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