Profit Maximization

In most cases, economists model a company maximizing profit by choosing the quantity of output that is the most beneficial for the firm. (This makes more sense than maximizing profit by choosing a price directly, since in some situations- such as competitive markets– firms don’t have any influence over the price that they can charge.) One way to find the profit-maximizing quantity would be to take the derivative of the profit formula with respect to quantity and setting the resulting expression equal to zero and then solving for quantity.

Many economics courses, however, don’t rely on the use of calculus, so it’s helpful to develop the condition for profit maximization in a more intuitive way.

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Understanding Foreign Direct Investment

According to the International Monetary Fund, foreign direct investment, commonly known as FDI, “… refers to an investment made to acquire lasting or long-term interest in enterprises operating outside of the economy of the investor.” The investment is direct because the investor, which could be a foreign person, company or group of entities, is seeking to control, manage, or have significant influence over the foreign enterprise. Read More

Impact Investing

What is Impact Investing

Impact investing is investing that aims to generate specific beneficial social or environmental effects in addition to financial gain. Impact investing is a subset ofsocially responsible investing (SRI), but while the definition of socially responsible investing encompasses avoidance of harm, impact investing actively seeks to make a positive impact by investing, for example, in non-profits that benefit the community or in clean technology enterprises. Read More

Strategic Alliance

What is a {term}? Strategic Alliance

A strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A strategic alliance is less involved and less binding than a joint venture, in which two companies typically pool resources to create a separate business entity. In a strategic alliance, each company maintains its autonomy while gaining a new opportunity. Read More

Forensic Accounting

What is Forensic Accounting

Forensic accounting utilizes accounting, auditing and investigative skills to conduct an examination into a company’s financial statements. Forensic accounting provides an accounting analysis suitable for court. Forensic accountants are trained to look beyond the numbers and deal with the business reality of a situation. They are frequently used in fraud cases. Read More

5 Important Principles of Modern Accounting

Whether you’re in the business of selling widgets, providing cleaning services, tending to animals, or manufacturing industrial equipment, your business operates under the same basic principles of modern accounting. These principles are generally accepted practices of accounting, which became commonplace in the 1800’s, though the original concepts are as old as ancient Mesopotamia.

The world of accounting took great strides with the treatise of bookkeeping, published by Luca Pacioli in 1494 within a book entitled, Summa de Arithmetica, Geometria, Proportioni et Proportionalita. These five basic principles form the foundation of modern accounting practices. Read More


What is an Investment

An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. Read More

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Cost Control

What is Cost Control

Cost control is the practice of identifying and reducing business expenses to increase profits, and it starts with the budgeting process. A business owner compares actual results with the budgeted expectations, and if actual costs are higher than planned, management takes action. As an example, a company can obtain bids from other vendors that provide the same product or service, which can lower costs. Read More

Employee Benefits and Compensation

Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans.

Benefits are forms of value, other than payment, that are provided to the employee in return for their contribution to the organization, that is, for doing their job. Some benefits, such as unemployment and worker’s compensation, are federally required. (Worker’s compensation is really a worker’s right, rather than a benefit.) Read More

Growing Your For-Profit or Nonprofit Organization

Whether your organization is a for-profit or nonprofit, you have to address certain considerations and make certain decisions if you set out to intentionally expand — or grow — your organization, products and/or services. You can grow your organization, products and/or services just by managing them well, for example, by having very good products and services that are sold with strong sales and customer service. However, this topic in the Library is for those with an explicit goal to intentionally grow the organization, product or service. Read More