ALLOWANCE Definition

ALLOWANCE, within Sales, is a concession granted to customers for unsatisfactory goods or services. Reduces sales because a portion of the sale has not been earned.

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LONG TERM DEBT is all senior debt, including bonds, debentures, bank debt, mortgages, deferred portions of long term debt, and capital lease obligations. If a firm shows little to no long term debt over the years and/or their earning power could allow them to pay off their long term debt within 3-4 years, it is a good indicator of a sustainable competitive advantage.

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