Bookkeeping

Assume an investor pays a $4 premium for a Meta (formerly Facebook) put option with a $180 strike price. That allows the put buyer to sell 100 shares of Meta stock (META) at $180 per share until the option’s expiration date. If the stock is trading above that price, then the benefit of the option has not exceeded […]

Assume an investor pays a $4 premium for a Meta (formerly Facebook) put option with a $180 strike price. That allows the put buyer to sell 100 shares of Meta stock (META) at $180 per share until the option’s expiration date. If the stock is trading above that price, then the benefit of the option has not exceeded […]

For example, a business might have certain expenses that are paid off (or reduced) over several time periods. If the business will stay operational in the foreseeable future, the company can continue to recognize these long-term expenses over several time periods. Some red flags that a business may no longer be a going concern are […]

While this dip in earnings may drop the value of the company in the short term, it creates long-term book value because the company’s equipment is worth more and the costs have already been discounted. Companies with lots of machinery, like railroads, or lots of financial instruments, like banks, tend to have large book values. […]