#financial-literacy
Essential financial knowledge and skills for business owners and entrepreneurs
APR spreads borrowing costs over a year without compounding; APY folds compounding into savings growth — compare APR to APR and APY to APY.
Assets and expenses increase with debits; liabilities, equity, and revenue increase with credits — the accounting equation sets every account's normal side.
A dollar today is worth more than a dollar tomorrow. TVM formulas for compounding and discounting, worked examples, and how to pick a discount rate.
A teen with only W-2 wages owes no IRS income tax under $16,100 for 2026 — file anyway to reclaim withholding, and fund a Roth IRA with 0%-taxed dollars.
Assets minus liabilities equals equity — and three ratios (current, quick, debt-to-equity) tell you in five minutes whether your business is solvent.
A teen owes a tax return at just $400 of net self-employment income — no age minimum. How the 15.3% SE tax, the $1,000 estimated-tax tripwire, the $20,000 1099-K threshold, and a custodial Roth IRA fit together.
Money habits form by age seven, yet only 22% of parents discuss money with their kids weekly. This age-by-age guide shows business owners how to turn the bookkeeping they already do — categorizing, ledgers, budget constraints — into practical financial lessons for kids from age 3 to 18.
Return on Equity (ROE) divides net income by owner's equity — a 15% ROE means the business earned 15 cents per dollar of the owner's capital. This guide covers healthy benchmarks (12–15% baseline, 15–20%+ strong), the three-part DuPont breakdown of margin, asset turnover, and leverage, and the pitfalls — debt-inflated returns, negative equity, one-time items — that distort the ratio.
Divide 72 by an annual rate and you get the approximate years for money to double: $50,000 at 9% doubles in 8 years, while a 24% credit card balance doubles what you owe in 3. How business owners can use the Rule of 72 to compare investments, price debt, and gauge inflation's drag on idle cash.
How to run a net present value (NPV) calculation before buying business equipment — a worked example ($50,000 machine, $20,000 annual savings, 12% discount rate yields $10,748 NPV), how to choose a discount rate, why NPV beats payback period and IRR alone, and the five mistakes that wreck the math.
About 40% of franchisors disclose no Item 19 earnings data in their FDD, and any verbal revenue claim outside that section is not legally enforceable — here's how to read what's disclosed and what to do when it isn't.
The 2026 federal income tax brackets run from 10% to 37%, adjusted upward by the One Big Beautiful Bill Act. A single filer with $100,000 in taxable income owes $16,712 — a 16.71% effective rate, not 22%. Complete bracket tables for every filing status, worked examples, and strategies to lower your taxable income.
