Fixed cost

fixed cost investment & finance definition
A cost that is constant regardless of the level of sales or production.

Fixed Cost
A cost that doesn't vary. The cost of owning a warehouse, for instance, might be the same whether it is full or empty. It's important in assessing a company to differentiate between fixed costs, variable costs and marginal cost.

Fixed Cost
Is an expense that is static regardless of the performance of the business regarding sales or new contracts, ex. utility's.
CATEGORIES ...

Definition
Fixed costs
Costs of doing business such as rent, utilities, depreciation, taxes, etc., that remain generally the same regardless of the amount of sales of goods or services.
RELATED CATEGORIES ...

Fixed Cost
A cost that remains constant, regardless of any change in a company's activity.
Fixed-Charge Coverage Ratio ...

Fixed Costs The company's expenses that remain fairly stable and do not vary from period to period in response to changes in the degree to which capacity is utilized on the basis of business or sales volume.

fixed costs: Costs that remain relatively constant regardless of the volume of the operations. Examples of fixed costs are rent, depreciation, property tax, and executive salaries.

One analogy is "fixed costs + variable costs = total costs ..similar to.. debt + equity = assets". This analogy is partly motivated because (for a given amount of debt) debt servicing is a fixed cost.

Fixed Costs and Variable Costs
Another way to think about scalable models is to look at a company's fixed costs versus variable costs.
Fixed costs are costs that a company incurs whether it sells or not.

Fixed cost
A cost that is fixed in total for a given period of time and for given production levels.
Fixed dates
In the Euromarket, the standard periods for which Euros are traded (one month out to a year out) are referred to as the fixed dates.

(Total Cost = Fixed Cost + Variable Cost).
Within the breakeven analysis you will also need to provide the total expected revenue. The formula for this uses the expected unit sales multiplied by the unit price: ...

fixed cost A cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense. fixed expenses See fixed cost.

Other good candidates to look for are debtridden companies which are struggling to make interest payments with falling revenue or companies with high operational gearing such as hotels and supermarkets who have fixed costs so a 10% drop in volume ...

If the transaction is made online, the commission is a small fixed cost, usually about $10 per trade. In today's very liquid and dynamic market environment, stocks are usually traded at a bid/ask-spread cost of 1/8 of a dollar or even lower.

A company with a lower fixed cost and a larger operating margin has more flexibility in pricing strategies and has a better chance of sustaining profit during poor market conditions than a company with a higher fixed cost and lower operating margin.

Capital expenditures and their related debt result in fixed costs. These are of less importance than the variable costs that can be expected to grow with increasing sales volume, in order to cover the fixed costs.

Opportunity costs The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades.

The bottom line about financial health is that when a company increases its debt, it increases its fixed cost as a percentage of total costs.

This will include both fixed costs and variable costs. For purposes of arriving at the break-even analysis, taxes certainly are taken into consideration.

The fixed costs of liquidating part of my portfolio were 6% of the fixed costs of obtaining the mortgage. Beyond that the question remains as to how well equities will do in the future, a question for which I have no good answer.

In small and medium businesses, fixed costs stand for the regular expenses that will not fluctuate with regard to production.

Domestic (U.S.) and multinational corporations issue fixed-rate capital securities to raise long-term capital at a fixed cost that is fully tax-deductible for the issuers.

The real beauty of this model for IMAX is that it has a fixed cost, and the payback, which is variable, grows as the theater network grows and more blockbusters hit IMAX screens.

The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades.
Optimal portfolio ...

A higher operating profit margin means a company has lowered fixed cost and a better gross margin or increasing sales faster than the costs, which give management more flexibility in determining price.

As the asset of a mutual fund increases, the fixed cost gets spread over a larger asset base. Therefore, the expenses incurred to operate the mutual fund as a percentage of the fund’s assets should trend lower.

Contribution margin : Used to denote the dollar amount that each unit sold will contribute in meeting fixed costs.
Credit Ratios : Credit Ratios reflect the liquidity position of the company.

And therefore the more shares you trade as capital into the market, the more your "fixed costs" will actually go down. The trader who trades 200 shares instead could make over $150, even with that high commission.

Opportunity costs
The difference in the actual performance of a particular investment and some other desired investment adjusted for fixed costs and execution costs. It often refers to the most valuable alternative that is given up.

The Point below which the Firm will need either to obtain additional financing or to liquidate some of its Assets to meet its fixed costs.

Related Links: ...

Companies that have low stock prices in comparison to their revenue often have recurring high fixed costs and thin profit margins. These profit margins can grow even thinner or may even vanish when the economy is fragile.

See also: Market, Share, Profit, Investment, Sales