INTEREST EXPENSE Definition

INTEREST EXPENSE is the cost of borrowing funds in the current period. It is shown as a financial expense item within the income statement. An interest expense of zero to <15% relative to operating income, within the consumer products industry, is an indicator of a sustainable competitive advantage.

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EXISTENCE, in accounting, deals with whether assets or liabilities exist at a given date. For example, management asserts that finished goods inventories in the balance sheet are available for sale.

EXERCISE, in business or law, to make use of a right available in a legally binding agreement, e.g. to implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security.

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