Definition The internal rate of return (IRR) is a financial metric used to evaluate the potential profitability of an investment or project. What is an internal rate of return? An internal rate of return represents the discount rate at which the net present value (NPV) of all cash flows associated with the investment becomes zero. […]
Definition A guarantor is an individual or entity that agrees to take on the responsibility of fulfilling a financial obligation if the primary borrower defaults or is unable to meet their contractual obligations. What is a guarantor? A guarantor’s primary role is to offer assurance to a lender or creditor that a financial obligation will […]
Definition A free market is an economic system characterised by voluntary exchange and competition in which individuals and businesses operate with limited government intervention. What is a free market? In a free market, prices, production, and distribution of goods and services are determined by supply and demand. A hallmark of a free market is competition. […]
Definition Enterprise value (EV) is a financial metric used to determine the total value of a company, taking into account both its equity and debt. What is enterprise value? This metric represents the theoretical takeover price a buyer would pay to acquire the entire business, including all outstanding debt and obligations. Here’s a list of […]
Definition A down payment is an upfront, initial payment made by a buyer as part of a larger transaction, typically for the purchase of a high-value item or property. What is a down payment? A down payment represents a percentage of the total cost and is paid at the outset of the transaction to secure […]
Page written by Chris Godfrey. Last reviewed on September 24, 2024. Next review due October 1, 2025. Chris Godfrey Expert financial copywriter Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five […]
Definition Crowdfunding is a method of raising capital where a large number of individuals each contribute a relatively small amount of money to support a specific project or idea and is an alternative to traditional methods of financing. What is crowdfunding? Crowdfunding can be used to fund a wide array of projects and operates through […]
Definition A credit score is a numerical representation of your creditworthiness, which is used by lenders to assess the likelihood of a borrower repaying their debts. What is a credit score? A credit score is based on an analysis of your credit history, including your borrowing and repayment behaviour, and is a crucial factor in […]
Inflation calculator Our inflation calculator helps you understand how the purchasing power of money changes over time due to inflation. Page written by Ian Hawkins. Last reviewed on June 3, 2024. Next review due October 1, 2025. Ian Hawkins Head of Content Ian Hawkins is Head of Content at Swoop. As a freelance business journalist […]
Mortgage overpayment calculator Overpaying on either a residential or commercial mortgage offers significant benefits. It reduces total interest costs and shortens the repayment period. This leads to accelerated equity buildup and increased financial flexibility. Even modest, regular overpayments can yield substantial interest savings over time. Page written by AI. Reviewed internally on June 3, 2024. […]
Definition A buyout refers to an individual, group of individuals, or another company purchasing a majority stake in the target entity, giving the buyer substantial control over its operations, decision-making, and future direction. Buyouts can occur for various reasons. What is a buyout? Types of buyouts: Management buyout (MBO): In a MBO, the current management […]
Definition A business plan is a document that outlines a company’s goals, objectives, strategies, and operational plans. It serves as a roadmap for the business, providing a detailed overview of how the company intends to achieve its mission and vision. What is a business plan? A well-structured business plan is crucial for attracting investors and […]
Definition Break-even analysis is a financial assessment tool used by businesses to determine the point at which total revenue equals total costs, resulting in neither profit or loss. What is a break-even analysis? It’s a critical component of financial planning and decision-making for businesses of all sizes. The analysis helps companies understand the minimum level […]
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