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Interest expense information


Interest expense relates to the cost of borrowing money.[1] It is the price that a lender charges a borrower for the use of the lender's money. On the income statement, interest expense can represent the cost of borrowing money from banks, bond investors, and other sources. Interest expense is different from operating expense and CAPEX, for it relates to the capital structure of a company, and it is usually tax-deductible.

On the income statement, interest income and interest expense are reported separately, or sometimes together under either "interest income - net" (if there is a surplus in interest income) or "interest expense - net" (if there is a surplus in interest expense).[2]

  1. ^ "How to calculate interest expense". AccountingTools. Retrieved 2017-10-24.
  2. ^ "Interest and Expense on the Income Statement". The Balance. Retrieved 2017-10-24.

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Interest expense

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Interest expense relates to the cost of borrowing money. It is the price that a lender charges a borrower for the use of the lender's money. On the income...

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Expense

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Operational expense – salary for employees Investing: Capital expenditure – buying equipment Expenditures (financial) Financing expenseinterest expense for...

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Earnings before interest and taxes

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(non-operating expenses) where EBITDA = earnings interest, taxes, depreciation, and amortization OPEX = operating expense A professional investor contemplating a...

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Times interest earned

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EBITDA divided by the total interest expense. Times-Interest-Earned = EBIT or EBITDA/Interest Expense When the interest coverage ratio is smaller than...

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Expense account

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utilities expense, discount allowed, cleaning expense, depreciation expense, delivery expense, income tax expense, insurance expense, interest expense, advertising...

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Net income

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items deducted will typically include tax expense, financing expense (interest expense), and minority interest. Likewise, preferred stock dividends will...

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Effective interest rate

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is used to describe the rate used to calculate interest expense or income under the effective interest method.[citation needed] This is not the same as...

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Free cash flow

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expenditure (CAPEX) = Capex − Depreciation and amortization Tax shield = Net interest expense × Marginal tax rate When Profit After Tax and Debt/Equity ratio are...

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Net interest margin

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earned interest income of $6.00 and paid interest expense of $3.00. The NIM then is computed as ($6.00 – $3.00) / $100.00 = 3%. Net interest income equals...

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Expenditures in the United States federal budget

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Interest expense on the public debt was approximately $678 billion in FY2023. During FY2023, the government also accrued a non-cash interest expense of...

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Net operating profit after taxes

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history and against competitors. When calculating NOPAT, one removes Interest Expense and the effects of other non-operating activities (non-recurring gains...

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National debt of the United States

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Interest expense on the public debt was approximately $678 billion in FY2023. During FY2023, the government also accrued a non-cash interest expense of...

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United States federal budget

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total interest expense of $432 billion. GAO reported that even though the national debt rose in FY2012, the interest rate paid declined. Should interest rates...

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Interest

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Credit card interest Credit rating agency DIRTI 5 Discount Fisher equation Hire purchase Interest expense Leasing Promissory note Risk-free interest rate "Barbon's...

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Second mortgage

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mortgages reduces the borrower's taxable income by the value of the interest expense. In general, total monthly repayments on the second mortgage are lower...

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Xerox

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interest expense related to a debt instrument and associated interest rate swap agreements, resulted in after-tax understatement of interest expense of...

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Capital expenditure

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Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain,...

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Financial ratio

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Shareholders Equity) Times interest earned ratio (Interest Coverage Ratio) EBIT/Annual Interest Expense OR Net Income/Annual Interest Expense Debt service coverage...

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Amortization schedule

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The schedule differentiates the portion of payment that belongs to interest expense from the portion used to close the gap of a discount or premium from...

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Tax deduction

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income and property taxes (the SALT deduction in the United States) Interest expense on certain home loans Gifts of money or property to qualifying charitable...

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Barron Hilton

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resorts contributed 45 percent of the company's income (before interest income, interest expense, write down of investments and sales of properties), nearly...

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Income statement

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510.1 5,268.6 ----------- ----------- ------------ Interest income 25.3 11.7 12.0 Interest expense (718.9) (742.9) (799.1) ----------- ----------- ------------...

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Credit card

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10% on the loan. This 10% difference is the "net interest spread" and the 5% is the "interest expense". Operating costs: This is the cost of running the...

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Weighted average cost of capital

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share of profits, flotation costs are typically lower than equity, and interest expense is tax deductible. But there are also disadvantages of the debt component...

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List of business and finance abbreviations

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Benchmark ICRM – Innovative Customer Relationship Management IE – Interest expense IFRS – International Financial Reporting Standard ILCLP – IdentLogic...

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Financial result

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financial result is defined as follows: Financial result  =  Interest income −  Interest expense ±  Write-downs/write-ups for financial assets ±  Write-downs/write-ups...

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Corporate tax

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allow a tax deduction for interest expense incurred by a corporation in carrying out its trading activities. Where such interest is paid to related parties...

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Free cash flow to equity

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principals paid and raised; Interest*(1–t) is the firm's after-tax interest expense. or F C F E = N I + D & A − C a p e x − Δ W C + N e t   B o r r o w...

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