Tangible vs. Intangible Assets: What's the Difference?
The value of intangible assets can be much more variable than tangible assets. This variability increases the likelihood of a discrepancy between book …
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The Difference Between Market Value and Book Value
Just like assets, the book value of a liability can differ from its market value. Learn about how investors assess both book and market values based …
Continue ReadingA Definition of the Principal-Agent Relationship
Principal-Agent relationships occur in many forms in business. Understanding these relationships is crucial for investors in order to make better …
Continue ReadingConflict in Principal-Agent Relationships
Whenever one person acts in the interests of another, there are bound to be conflicts between the agent acting on behalf of the principal and working …
Continue ReadingHow Investors Reduce Agency Costs in a Principal Agent Relationship
When one person acts in the interests of another, the possibility of a moral hazard results in expenditures to avoid a negative outcome for the …
Continue ReadingWhat are Agency Problems and the Moral Hazards that Arise from Them?
Conflict in principal-agent relationships, called an agency problem, results in monitoring by principals to protect their financial interests. Learn …
Continue ReadingEvaluating Market Value of Common Stock with Financial Ratios
Investors are constantly evaluating the value of owning stock in companies. Three common ratios help investors make decisions about market values.
Continue ReadingHow Debt Leverage Affect Investor Risk and the Value of a Company
Managing the amount of a corporation’s debt is crucial to the risk of owning shares of stock in a company.
Continue ReadingWhat are Generally Accepted Accounting Principles (GAAP)?
Generally Accepted Accounting Principles have been established so financial records and reporting by companies are fair and accurate.
Continue ReadingAvoiding Triple Taxation: The Deduction of Dividends from Taxable Income
To avoid Triple Taxation, most of the dividends received by corporations are not taxed. Read on to learn important taxation information for investors.
Continue ReadingHow Carrybacks and Carryforwards Affect Corporate Taxable Income and Tax Liability
Corporations reporting negative income may carryback or carryforward these losses into other fiscal years. Sometimes a refund of previously-paid taxes …
Continue ReadingHow Debt Interest and Stock Dividend Payments Affect Taxes
Debt interest paid to creditors and dividends paid to stockholders are treated differently from a tax perspective. This difference has a significant …
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