What Is Bootstrapping? Bootstrapping describes a situation in which an entrepreneur starts a company with little capital, relying on money other than outside investments. An individual is said to be bootstrapping when they attempt to found and build a company from personal finances or the operating revenues of the new company. Bootstrapping also describes a…
What Is a Loan Constant? A loan constant is a percentage that shows the annual debt service on a loan compared to its total principal value. The calculation for a loan constant is the annual debt service divided by the total loan amount. When shopping for a loan, borrowers can compare the loan constant of…
What Is Loan Servicing? Loan servicing refers to the administrative aspects of a loan from the time the proceeds are dispersed to the borrower until the loan is paid off. Loan servicing includes sending monthly payment statements, collecting monthly payments, maintaining records of payments and balances, collecting and paying taxes and insurance (and managing escrow funds),…
Domino’s Pizza, Inc. (DPZ) shares rose more than 25% during Thursday’s session after the company reported better-than-expected fourth quarter financial results. Revenue rose 6.5% to $1.15 billion, beating consensus estimates by $20 million, and non-GAAP earnings per share came in at $3.13, beating consensus estimates by 16 cents per share. Comparable sales rose 3.9% during…
What Is the Rule of 78? The Rule of 78 is a method used by some lenders to calculate interest charges on a loan. The Rule of 78 requires the borrower to pay a greater portion of interest in the earlier part of a loan cycle, which decreases the potential savings for the borrower in…
Morgan Stanley (MS) will buy E*TRADE Financial Corporation (ETFC) for around $13 billion in stock, adding over 5.2 million accounts to the company’s customer base of 3 million. The firm will now handle assets of over $3 trillion while gaining exposure to a less affluent retail demographic. Morgan Stanley CEO James Gorman crowed about the deal, telling…
The Dow Jones Transportation Average has failed to break out with major benchmarks, setting off a bearish divergence originally described by Dow Theory more than 100 years ago. This “non-confirmation” could be significant because it’s forecasting tougher times for blue chips and big tech in the second quarter. It’s even possible that the Dow Jones Industrial…
No, Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Social Security payments are transfer payments, which are not included. They are, however, counted as personal consumption expenditures (PCE) once they are used to purchase something. Because of this, counting Social Security payments issued from the government to…
Nearly all companies are required to prepare their financial statements as set out by the Financial Accounting Standards Board (FASB)whose standards are generally principles-based. FASB uses these principles in establishing its accounting practices and methods. Law requires U.S. companies to adhere to accounting standards when reporting their financial statements, but the specifics can vary depending…