What is CAPEX and OPEX? Capital expenditures (CAPEX) and operating expenses (OPEX) are two important items from a company’s cash flow and income statement (respectively). They are both key financial metrics that companies use to budget, forecast, and analyse their spending. Understanding the difference between CAPEX and OPEX is especially important for making

Perpetuities: Definitions, Concepts and Examples Perpetuities are an important concept in corporate finance and investment analysis. A perpetuity is a constant stream of cash flows that continues indefinitely into the future. Understanding perpetuities allows financial analysts to properly value assets and investment opportunities that involve long-term, ongoing cash flows. They are one the

Discount Rate Guide: Definitions, Formulas, Examples The discount rate is a crucial concept in corporate finance and investment appraisal. It is used to determine the net present value (NPV) of future cash flows thus accounting for the time value of money and enabling the comparison of projects and investments with cash flows spread over

Liquidity Ratios Guide: Types, Formulas and Examples Liquidity ratios are an important set of financial metrics used to analyse a company's ability to cover its short-term obligations. Companies fail not due to lack of profits in most cases, but due to their inability to meet their short-term cash requirements – i.e. they fail

Time Value of Money (TVM): Examples, Relevant Formulas and Interpretation Time Value of Money (TVM) is a core corporate finance concept that refers to the principle that money available now is worth more than the same amount in the future, due to its potential earning capacity today. The TVM concept underlies all calculations