How Can I Establish a Money Purchase/Profit Sharing Plan?
Like other qualified plans, these need a written plan document and investments to fund. A written plan document must be established and distributed to all employees notifying them of the plan and of all pertinent details, in language they can understand. Plans must be established by December 31 of the year for which contributions will be made, and, since the contributions come from the employer for both of these, the employer has at least 8 months of the following year to meet funding requirements. Continue reading...
What is Medicare Part C?
Medicare Part C, also known as Medicare Advantage, is offered in a few variations by several third-party carriers. These plans are approved by Medicare and a person must still pay their Part B premiums to get them, but the Medicare Advantage plans are designed to be more appealing with their deductibles and copays than original Medicare Part A and Part B. Medicare Part C, is a private plan that is mandated to be at least equal in coverage to Part A and Part B. Continue reading...
What is a Cash Conversion Cycle?
A business with a fast ‘cash conversion cycle’ can efficiently use funds and resources to fulfill the different needs of the business and to generate more business. In the simplest terms, the ‘cash conversion cycle’ is an accounting and efficiency model which measures how fast a retailer can disburse cash to suppliers and then receive cash from customers. To be more descriptive, the business would use cash from Receivables, to get Inventory (and cover Payables), sell that Inventory, and Receive cash again. Continue reading...
What are Current Assets?
Current Assets are items on a balance sheet that are either cash or are going to be cash in the near future. The current assets section of a balance sheet is an indication of cash flows and liquidity. The assets are usually listed in order of liquidity, or the amount of time that it will take for them to become cash. This section includes cash, accounts receivable, prepaid expenses, inventory, supplies, and temporary investments. (The order given here is not necessarily the order of liquidity found on a balance sheet.) Continue reading...
B+/B1 — credit tating
B+ — S&P / Fitch B1 — Moody’s B+/B1 is within the range of ratings given to High Yield Bonds, also known as Junk bonds. B+/B1 is the 14th rating rating from the top rating of AAA/Aaa in the scales used by the Big Three credit ratings institutions, which are Fitch, Moody’s and S&P. They evaluate the fundamentals of companies, municipal entities, and their bond contracts to determine how much risk of default is present. The limit for the category of Investment Grade bonds is BBB-, and there are a few categories of BB above B. Continue reading...
What is the Federal Budget?
A budget is a plan for expenses that seeks to keep them within the limitations of revenue inflows so that a business or organization does not operate at a deficit. The Federal Budget is much larger and more complicated that most budgets, but it works similarly. Because the use of funds is such an important issue on such a large scale, there are several steps needed to create and enact a budget. A Federal Budget is created every year. It originates with a proposed budget from the President. The two houses of Congress go through significant deliberation in committees and on the floor, working on the Appropriations Bills. They then reconcile their budgets between the two houses and send it to the President for approval. Continue reading...
What is triple witching?
Triple witching hour is when three types of derivatives expire at once, which happens once every quarter in the US. It typically results in irregular or volatile movements in the markets. When stock market index futures, stock market index options and stock options all expire at the same time, the hour before close is called the Triple Witching Hour. This occurs on the third Friday of March, June, September, and December in the United States between 3:00 PM and 4:00 PM Eastern time. Continue reading...
What is the MSCI World?
The MSCI World is perhaps the most well regarded index for global stocks. The MSCI World Index is a global cap-weighted index that serves as a good barometer for stock and economic performance of the world as a whole. If you are a global investor, the MSCI World makes for a very useful benchmark for performance. The index is maintained by Morgan Stanley, and has over 1,600 stocks listed in it from all developed markets in the world. It does not include emerging markets or China. Continue reading...
What is the MSCI ACWI Index?
The MSCI ACWI is the “All Country World Index” - providing the broadest measure for global stocks. The MSCI ACWI tracks performance of stocks from all over the world - literally. It includes all markets and gives the broadest picture for how world stocks are performing. Developed markets account for some 75% of total global output, so the MSCI ACWI includes many countries that are not necessarily palatable contributors to world growth. Continue reading...
What is the CAC 40 Index?
The CAC 40 is an index tracking performance of stocks in France. The CAC 40 is an index that tracks the 40 largest capitalization stocks of the 100 listed on the Euronext Paris stock exchange. It provides a good barometer for the performance and standing of the French economy. What is the DAX? What is the EURO STOXX 50? Continue reading...