Business Fundamentals
A foundational resource hub covering core business concepts every investor should understand. Explore articles on cost structures, operational principles, and the economic building blocks behind how companies function.
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Terms
Carrying Cost
Carrying cost refers to the total expense a business incurs to hold and maintain inventory over a period of time. It includes storage expenses, the cost of capital tied up in stock, insurance, taxes, depreciation, and the risk of inventory becoming damaged or obsolete.
Business Fundamentals
Cost Concepts
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Price Skimming
Price skimming is a strategic pricing approach where a company introduces a new product at a high price point to target consumers who are willing to pay a premium for early access, which is lowered gradually as demand falls over time.
Business Fundamentals
Sunk Cost
A sunk cost is an expense that has already been incurred and cannot be recovered, regardless of future outcomes. It represents money or resources spent on past decisions, such as investments in a failed project or outdated equipment. Since sunk costs cannot be changed, they should not influence future business or investment decisions; only potential future costs and benefits should matter.
Business Fundamentals
Cost Concepts
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