Month: April 2020

Undercapitalization occurs when a company does not have sufficient capital to conduct normal business operations and pay creditors. This can occur when the company is not generating enough cash flow or is unable to access forms of financing such as debt or equity.

A long-term capital gain or loss is the gain or loss stemming from the sale of a qualifying investment that has been owned for longer than 12 months at the time of sale. This may be contrasted with short-term gains or losses on investments that are disposed of in less than 12 months time. Long-term capital gains are often given more favorable tax treatment than short-term gains.1

A Wells Notice is a notification issued by regulators to inform individuals and companies of completed investigations where infractions have been discovered. It usually takes the form of a letter, which notifies recipients of both of the broad nature of the violations uncovered, and of the nature of the enforcement proceedings to be initiated against the recipient. The Wells notice is named after the Wells Committee, formed in 1972 by then-SEC Chairman William J. Casey in order to review the SEC’s enforcement practices and policies, and chaired by John Wells. read more

Effective Gross Income is the Potential Gross Rental Income plus other income minus vacancy and credit costs of a rental property.

Modus operandi is a Latin term used in English-speaking circles to describe an individual’s or group’s habitual way of operating, which forms a discernible pattern. The term is primarily used when discussing criminal behavior, but it is not exclusively uttered in this context. Modus operandi can also be defined as a specific method of operation.

Financial statement analysis is the process of analyzing a company’s financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization as well as to evaluate financial performance and business value. Internal constituents use it as a monitoring tool for managing the finances.