Author: phonecations

Meanings of Retention Periods Part III

Meanings of Retention Periods Part III

Commercial and business letters

A retention period of six years applies to commercial and business letters. An exception are documents that are kept in an open item accounting, because they have to be kept for ten years. Invoices and duplicates of invoices are also considered commercial letters, for it holds a ten-year retention period.

Tax documents

According to PSYKNOWHOW.COM, a retention period of 6 years applies to tax documents. This includes, for example, your travel expense reports and logbooks, but also certificates of exemption and working time lists.

Personnel records

Regarding retention periods for personnel documents, it is relevant whether they are relevant for taxation. In this case, they must be kept for six years. Payroll accounts and other documents that are relevant for payroll accounting are used for taxation purposes, as wage tax deductions are calculated and must be paid to the tax office. Payrolls are drawn up in many companies. They list the wages for each employee and break them down in columns according to gross wages, wage tax, church tax, solidarity surcharge, social security contributions and net wages. In the financial accounting only the sums of these columns are recorded. These documents form an important basis for financial accounting and should be kept for ten years.

Regulation for other business documents

Documents or other papers that allow insight into business transactions are considered other business documents. You can explain typical and atypical business transactions. Such other business documents can be contracts, protocols, freight documents, customs documents, order slips, delivery notes, credit documents, receipts, insurance documents, hourly and piecework slips, receipts, receipts, receipts, claims documents, payrolls. In addition, the storage of invoices is specially regulated. Accordingly, entrepreneurs must keep a duplicate of the invoices that they or a third party issued. In addition, all invoices that the entrepreneur has received must also be kept.

What retention periods apply to private individuals?

Private individuals also have to observe different deadlines for their documents. Here, too, you have to take into account different periods of 2.5, 6 and 30 years up to lifelong retention. Here are a few examples:

Retention period: 2 years

You are probably familiar with the two-year period from your everyday purchases of household items, for example. All sales contracts, invoices and receipts must be kept for warranty or possible exchanges. It is particularly important when it comes to tradesman’s invoices or contracts and invoices from appraisers, lawyers or notaries.

Retention period: 3 years

There are no regulations for this, but it is advisable to keep your bank statements and bank records for 3 years. If you have used a bank statement for your tax as evidence, you must of course keep it for more than 10 years.

Retention period: 5 years

This deadline is very important to you if you have bought or built a home. Because of the deadlines for complaints and claims for defects, you have to keep all relevant invoices and documents for 5 years.

Retention period: 6 years

According to § 147a AO (tax code), all taxpayers with an annual turnover of more than 600,000 euros per calendar year must keep their documents for 6 years. As a private person, you are also affected if you are among the high earners.

Retention period: 30 years

Hopefully, this deadline is seldom relevant for you, because it affects unpleasant documents such as payment orders and trial files as well as the resulting judgments.

Lifelong retention:

Lifelong retention is particularly important for your personal documents such as birth and death certificates. But also baptism certificates, marriage certificates, school reports and pension insurance documents or important medical reports.

When do retention periods begin and end?

The beginning and end of retention periods are specified in the Commercial Code and the Tax Code. The retention period begins at the end of the calendar year in which a receipt was created. It ends at the end of the calendar year in which it expires. It is not a question of possibly deviating fiscal and financial years, but always of the calendar year. A retention period begins, depending on the type of document, at the end of the calendar year in which

  • the last entry was made in the trading book
  • an inventory has been drawn up
  • an opening balance sheet or an annual balance sheet has been drawn up
  • either individual or consolidated financial statements have been prepared
  • a commercial letter has been sent or received
  • a booking voucher has been created
  • other business documents have arisen
  • an invoice was written
  • an invoice has been received
  • the last registered wage payment was made

If a retention period according to the legal regulations has expired or is about to expire, it does not expire if the documents are still required for taxes whose assessment period has not yet expired. The deadline does not expire even if important reviews are in progress or the documents are still required for other important incidents, such as legal proceedings.

Retention Periods 3

Meanings of Retention Periods Part II

Meanings of Retention Periods Part II

In the following we have put together some examples for the retention requirements of various documents. Including only those that occur most frequently. But the list is not exhaustive:

document Years
Accounting documents 10
Letters of credit 6
Offers that led to the order 6
Appendix to the annual financial statements (according to Section 264 of the German Commercial Code) 10
Fixed asset books and card indexes 10
Work instructions 10
Outgoing invoices 10
Bank receipts 10
Accounting receipts 10
User manuals for computerized bookkeeping 10
Operating cost accounting 10
Tax audit reports (external tax audit) 6
Evaluation documents 10
Hospitality receipts 10
Balance sheets (including opening balance sheet) 10
Accounting documents 10
Incoming invoices plus any correction documents 10
Export documents 10
Travel expenses documents 10
Payrolls 10
Business letters (received and sent) 6
Profit and Loss Account 10
Credits (to invoices) 10
Commercial letters (except invoices or credit notes) 6
Trading books 10
Inventories (according to § 240 HGB) 10
Annual financial statements with explanations 10
Journals for general ledger or current account 10
Calculation including documents (if tax-relevant) 10
Cash books 10
Chart of accounts and changes to the chart of accounts 10
Bank statements 10
Wage receipts 10
Payrolls for interim, final and special payments 6
Dunning notices and outgoing reminders 6
Sub-ledgers 10
Price lists, general 6
Price lists as booking documents 10
Auditor’s reports 10
Receipts 10
Invoices to entrepreneurs 10
Travel Expenses 10
G / L accounts 10
Check and bill of exchange documents, general 6
Check and bill of exchange documents, general 6
Check and bill of exchange documents as accounting documents 10
Correspondence 6
Donation receipts, provided booking documents 10
Tax returns and tax assessments 10
System manuals 10
Telephone cost statements as evidence for accounting 10
Liabilities (list) 10
Sales books 10
List of assets 10
Insurance policies for ongoing insurance 10
Insurance policies after the insurance expires 6
Contracts if they serve as accounting documents or are tax-relevant 10
Incoming and outgoing goods books 10
Change 10
Money orders 10

Retention periods of two years

Retention periods of two years apply to non-entrepreneurs and primarily concern invoices and payment receipts. In connection with the law to combat illegal employment, private individuals are obliged to comply with retention periods. These retention periods primarily affect owners of residential property in connection with invoices relating to property services. Invoices for various craft services, but also for planning services, maintenance work, gardening or cleaning services must be kept for two years. Although there is no retention period of five years for private individuals, invoices issued for services on the property should be retained for five years. This is important to prove if the property owner refers to the service provider’s warranty obligation.

Retention periods of six years

According to PHOTIONARY.COM, retention periods of six years apply to commercial and business letters that a company receives, but also to commercial and business letters that a company sends. The company must keep copies of these documents. Furthermore, documents that are important for taxation must be kept for six years. Wage accounts must also be kept for six years.

Retention periods of ten years

Retention periods of ten years apply to invoices and other bookkeeping documents with a book function, such as B accounting documents. The shorter periods only apply if shorter retention periods are permitted in other tax laws. Shorter retention periods, which are stipulated in non-tax laws, do not apply to the tax retention obligation. It should be noted that the invoices must be legible for the entire retention period. In this case, periods of ten years are relevant for the tax retention requirement. Retention periods of ten years apply primarily to

  • Books, trading books and other records
  • Inventories
  • Annual accounts
  • Individual financial statements
  • Opening balances
  • Consolidated Financial Statements
  • Situation reports
  • Bills
  • Group management reports
  • Work instructions and organizational documents for understanding the books
  • Accounting documents
  • Documents for customs declarations
  • Duplicates of outgoing invoices
  • Incoming invoices

Unlimited retention periods

In contrast to invoices or accounting documents, which have a limited retention period, unlimited retention periods are referred to as permanent values. Such unlimited storage applies in public administration to documents mostly marked with a “D”. These are primarily files on proceedings before the Federal Constitutional Court, property documents, construction plans for important buildings, legal documents or civil status records. The longest retention period in the economy is ten years. From a commercial and tax law perspective, there are no longer retention periods in business, but various documents such as patents should be used, Construction plans, court rulings, property documents, shareholder agreements and personnel files are kept indefinitely.

Retention periods for various documents

Accounting documents

Various documents fall under the category of accounting records. Invoices count as accounting records, but receipts, delivery notes, bank statements, utility bills, booking instructions, postage books, cash reports, process files, order slips and payrolls are also considered accounting records. In short, accounting records are all documents relating to the individual business transactions. The following applies: accounting records with capital-forming benefits have a ten-year retention period. This is due to the Tax Amendment Act of 1998, the revision of which extended the retention periods for accounting documents from six to ten years.

Bank and cash receipts

Bank and cash receipts are also accounting receipts. Not all bank and cash receipts need to be retained if the purpose of retention is otherwise secured. Such receipts that do not need to be kept are receipts, cash register slips, or receipts. If end-of-day total receipts are kept instead of cash register strips, this is sufficient. The completeness must be guaranteed, information on the name of the business, end-of-day total and date must be available. Here, too, it should be noted that these accounting documents must be kept for ten years.

Retention Periods 2

Meaning of CFD

Meaning of CFD

According to abbreviationfinder, CFD stands for “Contract for Difference”. With a CFD, investors can make profits by speculating on price changes. Contracts for difference are particularly attractive because they are characterized by a high level of leverage. This means that even a low capital investment can bring high profits. However, leverage can also have a negative effect: If the price does not develop as hoped, investors can quickly lose large sums of money. Therefore, CFDs are not suitable for beginners, only for experienced investors.

  • With a CFD, investors and providers agree to swap money and base value at the beginning and end of the term of the CFD.
  • In order to be able to trade with CFDs, the trader must deposit a security deposit (“margin”).
  • CFDs work with a high leverage effect, which multiplies the margin and moves large sums in the market with little capital investment.
  • This mechanism makes CFD trading attractive, but it also carries a great deal of risk.

What exactly is a CFD?

CFDs belong to the category of derivative financial instruments and are highly speculative. Every CFD is a contract between two parties: the investor (or trader) and the provider (or market maker). You speculate on the price development of a certain base value and agree to exchange money and base value at the beginning and end of the term of the CFD. Various trading values ​​are used as the base value, for example stocks, commodities or currencies.

Trade CFDs

The investor can open a long position or a short position. In the case of a long position, he expects the price of the corresponding underlying asset to rise and buys it. At the end of the CFD he sells it again and in the best case makes the previously speculated profit. With a short position, the investor expects falling prices and sells the value in order to buy it back later at a lower price, which results in a profit if it is successful. Speculation is based on various indices.

CFDs are short-term speculative transactions that are often completed within a day. Accordingly, the prices are exposed to strong fluctuations, which increase the risk of loss. If you want to hold your position overnight, i.e. beyond the close of trading, you have to make compensatory payments. The amount of these payments results from the respective calculation basis, the holding period and the position size at the close of trading. The following applies to short positions: If the reference interest rate exceeds the discount, the investor receives a credit.

The transactions take place over-the-counter (OTC). Not every platform allows CFD trading. The broker comparison shows where CFDs can be traded .

Important terms relating to contracts for difference

Investors who want to trade CFDs should know the following terms:

  • Margin: The margin is a security deposit that the trader deposits when opening a position. How big this has to be depends on the underlying asset being traded. The margin is tied to the respective position; The investor can invest the untied capital in further positions.
  • Leverage: By providing security, investors leverage their capital many times over. For example, if the margin is 1 percent and you bet 100 euros, you can move a capital of 10,000 euros.
  • Stop Loss: Traders set a stop loss limit at the point where their position should be automatically closed if the price should develop in the opposite direction to expectations.
  • Base value: The base values ​​are the actual trading values. These are, for example, indices, stocks, commodities or currencies.
  • Intraday trading: The investor opens his position at the beginning of the day and closes it again at the end of the day. So he carries out the CFD business within a day. This practice is common for short-term speculations.
  • Overnight position: If a trader holds his position beyond the respective close of trading, it becomes an overnight position. Compensation payments are due for this.
  • Diversification: In order to increase their chances of winning, investors often open several positions on different markets. In this way, you distribute your capital over several underlyings and a single loss is less significant.

Risks when trading CFDs

Trading Contracts for Difference is a very risky business. The high leverage can on the one hand bring high profits, but on the other hand lead to large losses. The available total capital is often smaller than the lost amount, which leads to a total loss. However, the account cannot be overdrawn and private investors are not obliged to make additional contributions after a decision by BaFin since August 10, 2017. That at least limits the incalculable risk of loss.

What happens in the event of a total loss?

If the loss exceeds the capital available on the CFD account, the bank usually arranges for a forced closing; that is, it closes all open positions of the investor. Before the deposited security deposit is used up, the bank also warns with an initial margin call when 80 percent of the credit has been used up. A second margin call follows at the 90 percent limit and at the same time announces the impending forced closing.

Other risks

Some of the other risks associated with CFD trading include:

  • Overnight risk: Investors cannot react immediately to price changes in positions held overnight.
  • Market price risk: Underlyings can change.
  • Liquidity risk: In the event of market disruptions and outside trading hours, investors cannot open or close positions.
  • Day trading risk: If a trader makes losses within a day and tries to compensate for them with even riskier new deals, the loss can multiply in the event of failure. The high level of trading activity can also lead to high transaction costs.
  • Bank or market maker insolvency.
  • Organizational and operational risks.

How can the risks be reduced?

The risks involved in trading Contracts for Difference are great and varied. However, through skilled risk management, investors can limit the risk of loss. Before opening new positions, they calculate the profit factor – using the value of the winning trades and the value of the losing trades as well as the average profit and average loss. If the profit factor is greater than 1, the trader can make money, so his plans are profitable. In addition, he should define an initial risk that he is maximally willing to take and set a stop loss accordingly.

A proven money management model is the “1 percent from the account” model. Investors choose a risk of 1 percent for each position. Another means that reduces the risk of loss and increases the chances of winning is diversification.

CFD - CONTRACT FOR DIFFERENCE

Meanings of SWOT Analysis Part II

Meanings of SWOT Analysis Part II

The individual points of the SWOT analysis

The usual way of creating a SWOT analysis begins with the two main parts, the company analysis as an internally-related part and the environmental analysis with external aspects. Both can be represented in a simple four-field matrix so that the individual points can be related to one another. From this connection, final deductions of suitable action strategies are possible.

Company analysis (internal)

As the name suggests, company analysis relates to the company itself. This is a self-observation to determine the internal factors, divided into strengths and weaknesses. These are to a certain extent the result of organizational processes, but also characteristics such as a good image. It should be noted that these are properties that we have produced ourselves. For example, a satisfied customer base of a green electricity producer may be a strength, but the generally good image of green electricity is definitely an (external) opportunity.

Environmental analysis (external)

Such external factors are in turn incorporated into the environmental analysis. This relates to the direct corporate environment, i.e. all external circumstances that are related to the company. The two characteristics to be analyzed here are opportunities and threats. It is important that these external conditions and / or changes are exogenously acting forces. This means that the company itself cannot influence this under any circumstances. Here it is important to keep an eye on those factors and to anticipate any changes. Once again, it is important to correctly differentiate between strengths and opportunities or weaknesses and risks. According to abbreviationfinder, SWOT stands for Strength, Weakness, Opportunity, and Thread.

Strengths

The internal strengths of a company, an institution and so on are those things that it is good at, so to speak. In particular, strengths are revealed when comparing with competitors, i.e. when looking at the competition. Examples of this are aspects such as a favorable location, good product quality, high qualification of the employees or whether the company works with low fixed costs . For the analysis of an individual, aspects such as a fundamental, ambitious optimism, creativity or certain professional qualifications should be mentioned here.

Weaknesses

The weaknesses are naturally the counterpart to the strengths. In this respect, they can also be filtered out particularly with a view to the competitive situation and the competition. Internal weaknesses, for example, an unfavorable location , deterioration in quality, too few employees or low financial strength are appropriate to the strengths . Certain dependencies may also be an individual weakness. For an individual, a lack of know-how, low resilience or low mobility must be listed accordingly.

Opportunities

The third point is to discuss the opportunities. The development in the respective market or in the environment is particularly important for a company, as it can be seen whether there is a change in customer behavior. In addition, trends can arise which influence the position of a company. New technological developments may also offer potential for profitable innovations, product improvements or the optimization of work processes. For example, this includes an expansion of the infrastructure, the broadband network (also for communication between employees) or positive demographic developments.

Threads (Risks)

Always important and a decisive point are ultimately the risks that arise from the outside. Such risks can ultimately have a negative impact on sales and, in the worst case, even lead to bankruptcy. It may be necessary to comply with legal changes or to enter into competition with new competitors who may even have settled in the immediate vicinity. In a sense, all opportunities in the opposite direction can pose a risk. This means that infrastructural or demographic developments also play a role here. Last but not least, one or the other risk can arise spontaneously, but all the more threatening – for example, the sudden lack of availability of a sales partner.

Combinations

After creating the aforementioned matrix with the SWOT factors just listed, the next step is to combine the individual points. The internal and external points are combined in detail. In other words, there are four connections in total: strengths with opportunities, strengths with risks, weaknesses with opportunities, and weaknesses with risks.

From these relationships to one another, suitable measures, actions and strategies can be developed that correspond as closely as possible to the objective of the analysis. To a certain extent, these actions can be summarized as expanding (strengths-opportunities), safeguarding (strengths-risks), catching up (weaknesses-opportunities) and avoiding (weaknesses-risks).

SO (Strengths & Opportunities)

The combination of strengths and opportunities is about determining which strengths of a company or similar can contribute to realizing opportunities. Which positive factors can be used here in order to benefit as much as possible from the opportunities that arise? In particular, expansion strategies are aimed at researching and realizing export and investment potential.

ST (Strengths & Threads)

The strengths and risks connection on the other hand ideally enables protection against emerging or general (economic, cultural, political etc.) threats. The strategies developed from this are accordingly aligned in such a way that they effectively use internal strengths to cushion, offset or even completely ward off environmental hazards, i.e. ultimately to counter these external circumstances for the benefit of the company.

WHERE (Weaknesses & Opportunities)

The combination of weaknesses and opportunities is less about the use or benefits of internal factors, but more logically about reducing those negative characteristics. In other words, in relation to favorable circumstances that arise, it is necessary to develop strategies and measures that reduce or eliminate the respective weaknesses as far as possible. When it comes to catching-up strategies, the consideration of whether weaknesses can even become strengths plays a central role.

WT (Weaknesses & Threads)

Ultimately, the most difficult and most drastic combination is that between existing, internal weaknesses and emerging, external risks. Above all, it is imperative to reduce weak points and negative factors in order not to let them develop into risks. Thus, more than any other, security strategies need to be developed selectively and applied accordingly. It is important to analyze exactly in which weak company aspects occurring risks would weigh particularly heavily.

Graphic

For the elaboration of all mentioned parts of the analysis and the representation of the SWOT factors, a graphic representation has always proven itself. As mentioned, the simplest and yet effective option for this is a corresponding matrix with four fields for the respective SWOT points. A continuation of this simple representation includes the strategies. This shows optimally how the internal and external aspects can be combined with one another and which strategy results from each one.

Areas of application of the SWOT analysis

In spite of all the ease of use, the question of practical application naturally arises. When is a SWOT analysis suitable? In fact, there are numerous areas in which such data collection and analysis makes sense.

First and foremost, there is a simple way of examining the location of an entire institution or individual products, processes or other objects. With the help of the SWOT analysis, it is possible to assess the competitiveness and assess the effectiveness, efficiency and profitability of business areas, product lines and so on.

In connection with this, the analysis process also functions as part of the evaluation of customer opinions and public perception, either in relation to individual objects or an entire company. The SWOT analysis is therefore particularly useful in marketing and should ideally be part of an overall concept. Finally, the advantage of a well-developed SWOT matrix is ​​that it can be used flexibly.

In addition, it provides a reliable method for developing a business plan, a basic business strategy or the (re) alignment of a company. In this respect, a SWOT analysis is also suitable for start-ups and self-employed entrepreneurs. Furthermore, the usefulness of such an analysis should be mentioned again when it comes to individual career planning.

How is a swot analysis created?

The preparatory work for the actual SWOT analysis first of all represents the basic objective. In fact, an effective analysis only succeeds if the respective data is related to a clearly defined goal. The mere increase in sales, for example, is a rather vague goal, while the increase in sales for a certain product allows more depth in the analysis as a target.

In order to then create a SWOT analysis, a whole team should work together at best. This ensures that all factors are perceived from different perspectives and thus determined as correctly as possible. It is useful to work with questions and to target the individual SWOT factors. For example:

  • What can the company do better than a competitor / the competition? (Strengthen)
  • Where does the company’s good image come from? (Strengths or opportunities)
  • Which areas did you notice again and again due to problems? (Weaknesses)
  • Why do other companies get the contract? (Weaknesses or risks)
  • Which trends are affecting the company now or in the future? (Opportunities or risks)
  • Which cultural / political developments are foreseeable? (Opportunities or risks)

Evaluation of the SWOT analysis

Following the complete analysis of all factors, the combination of the matching points takes place as an evaluation, as mentioned. This evaluation finally results in the strategies that support the objectives set in advance. Once those strategies have been implemented and implemented, there is finally a need for control. The corresponding key figures are then used, as already described.

SWOT Analysis 2

Meanings of EBIT

Meanings of EBIT

EBIT is earnings before interest and taxes . This means that the operating result is presented independently of the amount of taxes and the forms of financing used, so that a company can evaluate itself in an international comparison.

Definition

“Earnings before interest and taxes” , or EBIT for short via abbreviationfinder, is also referred to as the operating result of a company. This is a key figure from business administration , with the help of which the profit that a company has achieved in a certain period of time can be read.

The amount of taxes and interest charged on loans vary in different countries. Therefore, after deducting these costs, the result of the respective company is no longer suitable for an international comparison. The operating result, however, is not influenced by such factors. It is therefore useful for evaluating a company, for example.

EBIT calculation

EBIT is calculated using either the total or cost of sales method. Both methods serve the profit and loss account of a company and offer the possibility of determining the EBIT as a subtotal.

In the total cost  method, you compare the sales in a period with the total expenses incurred in the same period. In the cost of sales method , however, the sales of a period are compared with the direct production costs for these sales.

When comparing the EBIT of two or more companies, it is not just a matter of looking at the key figure itself. In addition, you should make sure that it was determined using the same method in all cases. Roughly speaking, the total cost method is a variant that is more commonly used in the German-speaking area. The cost of sales method, on the other hand, is more likely to be used in the Anglo-Saxon region and for companies that are listed on the stock exchange or are internationally active.

A simple formula for calculating EBIT:

Net income
+ tax expense
– tax income
+ interest expense or other financial expenses
– interest income or other financial income Earnings
= EBIT

What does the EBIT figure say?

EBIT is a key figure for the operating result . All expenses that you cannot assign to the actual activity of the company are filtered out for the calculation. Extraordinary expenses and income are also not taken into account.

Interest and taxes are ignored in the calculation, as they do not relate directly to the result of the operating business. This is how the company’s operating result is presented.

EBIT margin

You don’t take interest and taxes into account when calculating EBIT. Therefore, it is also possible to compare companies from several countries in this way. The results from the balance sheet are often falsified by various tax or interest rates, but this is not a problem with EBIT.

The so-called EBIT margin , which you can calculate as follows:

100 * EBIT / sales = EBIT margin in percent

It indicates how high the operating result was in relation to the company’s annual turnover . In short, a higher value means that a company is operating particularly economically. However, you should note that the value can differ significantly from industry to industry. Comparisons across different industries should therefore not be based on this margin.

The general rule of thumb is that a company with a margin of less than three percent is considered not very profitable or even vulnerable to crises. On the other hand, there is high profitability if the value is more than 15 percent.

EBIT

Meanings of ROI

Meanings of ROI

The ROI is a business key figure for the return of a company. It is measured by the percentage ratio of capital employed and profit achieved and can be used to assess an investment, the performance of a branch of business or the entire company.

Short for ROI by abbreviationfinder, return on investment is a key figure calculated from the return on sales and capital turnover, from which the relationship between the capital invested and the profit achieved results. It can also be viewed as the profit target of a company or an individual business area, since it expresses the amount of the expected return flow of capital from an investment.

The ROI thus serves as a benchmark for the performance of companies or certain areas of the company in a certain period of time. Its development goes back to the American engineer Donaldson Brown, who defined it in 1919 while working for the chemical company Du Pont de Nemours. It is considered the key figure of the so-called Du Pont scheme. This oldest and most well-known key figure system, with which balance sheet analyzes can be created from several such figures and entrepreneurial decisions can be controlled, was also developed by the eponymous group. In the Du Pont scheme, the ROI is defined as the multiplication of return on sales and capital turnover.

The calculation of the ROI makes sense if it can be assumed that an investment will pay for itself within its expected useful life. In the IT sector, this useful life is set very low at around three years; it can be significantly longer for buildings and production facilities.

Calculate return on investment – ROI formula

To calculate the ROI, the total capital of a company, which is made up of equity and debt , is always used . However, according to a modernized variant of the ROI, individual investments can also be calculated. The prerequisite for this is that the returns from the individual investment are already known.

The ROI formula explains: This is behind the key figures for the calculation

Return on sales

The return on sales (also: Return of Sales (ROS) or net return on sales) is understood to be the relationship between profit and sales within an accounting period. It can be used to read what the percentage profit of a company is in relation to a certain turnover. For example, if the return on sales is 10%, this means that ten cents of profit were made for every euro wagered. If the return on sales increases, this is an indication of increased productivity, a falling ROS, on the other hand, means less productivity and thus increasing costs. The ROS can be calculated using the formula:

Return on sales = (profit / net sales) x 100

Capital turnover:

The capital turnover indicates the ratio of equity or total capital employed to sales. The reference values ​​for calculating the capital turnover are the average total capital and the sales revenue within a business period. By determining the capital turnover, it is possible to determine how much turnover was achieved with a certain amount of capital in a certain period. The formula for calculating the capital turnover is:

Capital turnover = net sales / total capital (or invested capital)

An example of calculating the ROI

A company is investing 50,000 euros in advertising in order to acquire new customers. For this measure, the company achieved a turnover of 60,000 euros.

The capital employed is therefore 50,000 euros, the generated sales 60,000 euros and the profit thus 10,000 euros (sales – costs = profit). Now just insert into the formula:

Return on Investment (ROI)

= Return on sales x capital turnover

= (Profit / sales) x (sales / invested capital)

= (10,000 / 60,000 x 100) x (60,000 / 50,000)

Return on Investment (ROI) = 2 = 20%

The calculated return on investment is therefore 2 or 20%, which means that with every euro invested, a profit of € 0.20 (and € 1.20 sales) was generated.

Analysis and interpretation of the ROI

For a correct analysis of the ROI, it is important to note that only monetary and internal company factors are recorded by it. Influences that have to do with the market situation, image values, customer satisfaction, risks and competitors as well as time factors are not included. For this reason, the return on investment should never be used as the only analysis tool for evaluating company performance.

As can be seen from the formula, the ROI is characterized by two important company-specific key figures and can therefore:

  • have the same result in different combinations,
  • be increased if the return on sales (profit: sales) decreases but the capital turnover (sales: capital) increases,
  • The independent analysis of return on sales and capital turnover are carefully examined for changes and their causes.

The results of the ROI calculation in percent can be compared with profit targets: A return on investment of 7.5 means that a certain amount of capital has brought in a return of 7.5%. Such a value can be quite satisfactory for traditional companies, whereas growth sectors will aim for values ​​between 15 and 25%.

What are the advantages of calculating the return on investment?

Even if the informative value of the ROI is limited by the mentioned limiting factors, there are some undeniable advantages. The ROI provides important data for:

  • the analysis and comparison of individual company areas and investment objects,
  • the determination and consideration of the overall performance of a company for a past period,
  • the planning and control of future investments

The importance of ROI in marketing

In marketing, the return on investment is particularly important in order to be able to plan in advance and finally evaluate the efficiency of an advertising campaign from a financial point of view. For this purpose, two units of measurement are used that are directly related to the ROI.

ROMI (Return on Marketing Investment, also: RoMI):

The ROMI measures – just like the ROI – the relationship between capital employed and profit achieved. However, it only relates to the marketing sub-area. For the calculation, the entire effort for a marketing measure, such as product costs, marketplace costs and pricing, is included. The formula for calculating the ROMI is:

ROMI = (net sales – product costs – advertising costs) / advertising costs

ROAS (Return on Advertising Spend):

The ROAS represents the profitability of an advertising measure. Among other things, it is used to implement measures that increase the quality of the measure and / or reduce the costs if the results of a campaign are negative.
The ROAS is calculated using the formula:

ROAS = (net profit / advertising costs) x 100

ROI

Meanings of SME

Meanings of SME

Over the years, after the Second World War, Germany has become the world export champion . Today the country is one of the undisputed industrial nations. Our country also owes this to its SMEs , because they represent the strong backbone of the German economy. You can find out what you need to know about SMEs in the following article.

SMEs – European Commission definition

SMEs are defined more precisely by the European Commission in EU Recommendation 2003/361 . The basis for this are defined orders of magnitude. According to Abbreviationfinder, SME stands for small and medium-sized companies , which are divided into the number of their employees and the turnover or their balance sheet total .

Good to know:

In the EU, SMEs are also known as SME . This abbreviation comes from English and means small and medium-sized enterprises . This definition is important because it is crucial for access to finance , but also for access to EU support programs. These are specifically geared towards SMEs and their definition.

Definition of micro-business

A micro enterprise is very often called a micro enterprise . It is a company that employs less than 10 people and

  • generates a turnover of less than two million euros per year or
  • has a balance sheet total of less than two million euros.

In most cases, the owner of a very small business pursues the goal of feeding or providing for themselves and their families with this business.

Definition of small businesses

According to the definition of the European Commission, small companies have fewer than 50 employees and

  • have a turnover of less than 10 million euros or
  • a balance sheet total of less than 10 million euros.

Definition of medium-sized companies

A medium-sized company is a company that has fewer than 250 employees and

  • the turnover at a maximum of 50 million euros or
  • total assets of a maximum of 43 million euros.

Criteria for classifying SMEs

Micro, small and medium-sized businesses

In the EU there have been threshold values ​​or criteria since 01.01.2005 according to which an SME is classified. This classification is already evident from the definitions above. Seen at a glance, these criteria are as follows.

These thresholds are valid for all sole proprietorships . If it is a company that functions as part of a group, to have it both number of employees and turnover or find total assets of the whole group into account.

How do I calculate my number of employees?

The size of a company (up to 10 employees, more than 10 up to 50 employees and more than 50 employees) always refer to full-time employees in the DGUV according to regulation 2 . This means that when calculating the number of employees , you have to convert all your employees , including part-time employees, into full-time employees .

Method

To do this, proceed as follows: All employees who do not work more than 20 hours per week must be multiplied by the factor 0.5 . If someone works for you for a maximum of 30 hours per week , you have to use the factor 0.75 as a basis for the calculation .

Example:

You are an entrepreneur and you have 13 employees . These are made up as follows:

Type of employee calculation
4 full-time employees 4x factor 1 = 4.0
7 employees part-time until 8 p.m. 7x factor 0.5 = 3.5
2 MA part-time up to 30 / h 2x factor 0.75 = 1.5
Number of employees converted to full-time 9.0

That would mean that you would have 9 employees in your company and you would therefore fall into the category of small businesses .

Definition of annual sales

The annual turnover is understood as the total turnover of all services sold in a year . The annual turnover, also called revenue , is calculated from the sales volume and the sales price .

Definition of annual balance sheet total

The annual balance sheet total is understood to mean the total of fixed and current assets on the assets side of a company and the total of equity and debt capital on the liabilities side at the end of a financial year.

Definition of company types

In addition to the size classification of SMEs, the different types of companies are also precisely defined.

Independent company

Companies that do not hold any shares or voting rights in a company are referred to as independent companies . This must not exceed a share of 25 percent . There are exceptions , however , if this threshold is 25 percent or more.

  • Government venture capital companies, universities or research institutes without the purpose of profit tracking, venture capital companies
  • Institutional trading investors (including development funds)
  • Local authorities that are autonomous and that have an annual budget of less than 10 million euros and fewer than 5,000 inhabitants

Affiliates

These are companies that must meet at least one of the following requirements:

  • The company is required to prepare consolidated annual financial statements .
  • The company holds the majority of voting rights by shareholders or members of another company.
  • The majority of employees from administration, management or from the supervisory body of another company can be appointed or dismissed by the relevant company.
  • The company is entitled to exercise control over another affiliated company through a concluded contract or through clauses in the articles of association .

These points also apply when there is a reversal in the relationships between the companies .

Partner company

A partner company is a company which, together with one or more other companies or alone, holds from 25 percent to a maximum of 50 percent of the capital or voting rights in another company . The same limit values ​​also apply to shares held.

KfW templates and calculation sheets for SMEs

A KfW calculation scheme forms the basis for calculating the threshold values . This is available to every SME. You can find out what needs to be considered for the individual types of company mentioned above in the KfW information sheet on the definition of SMEs.

SME

Advantages and problems of SMEs

As with a large company, there are also advantages and disadvantages in the area of ​​SMEs , which we will discuss below:

Benefits of being an SME

  • An SME has flat hierarchies and structures in its organization. This gives you short decision-making paths and creates a high degree of flexibility and stability
  • There is a great proximity to the stakeholders . The customer contact is very close and also within the company the cooperation is personal .
  • Due to the proximity to the owner family in an SME, there is in most cases a long-term orientation for such companies .
  • Continuous innovations are created by selected and motivated employees.

Even if SMEs are also seen as job engines and great training companies, there are also challenges here:

Difficulties that SMEs pose

  • The resources in the areas of finance and human resources are very scarce . It is not uncommon for dual functions to occur.
  • Strategic knowledge and methods are very important for corporate success. However, SMEs very often lack the necessary knowledge here.

Examples of companies from SMEs

Type of business Check criteria SME: yes or no?
Painting company; 17 employees; Turnover per year 45,000 euros; independent company → Number of employees
→ Annual balance sheet total → Annual
turnover
→ Company type
SME small business
Auto repair shop; 10 employees (including 3 part-time with 20 hours a week); Turnover per year 39,000 euros; independent company Small and medium-sized enterprises
Manufacturer in office furniture; 310 employees; Annual balance sheet total of 58 million euros; Partner companies with a stake in a supplier company of more than 30% Not an SME
Meanings of Retention Periods Part I

Meanings of Retention Periods Part I

In business life, important documents such as accounting receipts and invoices must be archived. They have to be kept for certain periods of time as they serve as evidence. The retention periods vary depending on the type of documents. They are regulated by law. If they are not adhered to, a company can be punished with fines. There are also retention periods for private individuals for various documents, such as invoices and bank statements. In the case of private individuals, non-compliance with the retention periods can also be punished with a fine. In order to find the documents quickly, business documents, invoices and accounting documents should be archived in an orderly manner.

What are retention periods?

According to PHONEJUST.COM, retention periods are the periods of time for which you have to keep documents that are subject to retention. It can be a document for a completed business process, but also for an ongoing business process. Your retention period begins at the end of the calendar year in which the receipt was created. Retention periods must be adhered to, since completed business transactions could be significant again later. This can be the case if a limitation period has not yet expired and a forfeiture has not yet occurred.

Warranty periods and product liability periods, which require longer retention periods for business documents, apply to various business transactions. Destroying the receipts would result in a lack of evidence that would be detrimental to your company. It is also important to keep your documents (invoices, accounting receipts) in the event of legal disputes and tax audits , as they serve as evidence. Processes that can no longer be remembered can be derived from these stored documents.

Retention periods are set out in commercial and tax law. In addition, industry- and application-specific retention periods for documents apply. They primarily apply to

  • public administration
  • hospitals
  • quality assurance
  • food and pharmaceutical production
  • pharmaceutical research
  • power generation
  • construction
  • telecommunications
  • environmental Protection

Who has to adhere to the retention periods?

Every company, every organization and even private individuals have to fulfill retention obligations that relate to different obligations to provide evidence. These are defined for traders according to tax and commercial law. In § 147a AO (tax code) it is stipulated that all taxpayers who have achieved a turnover of more than 600,000 euros in a calendar year must keep their documents for 6 years.

Statutory retention requirements

Commercial retention obligation according to HGB

According to the Commercial Code , every merchant is obliged to store documents within specified periods. These documents (invoices, accounting receipts, business documents) must be kept for documentation and preservation of evidence and presented in the event of audits and legal disputes. Since the statutory retention periods guarantee the submission of the bookkeeping, they must be observed by all those who are obliged to keep books.

They apply to merchants and everyone who is obliged to keep accounts under the tax code. Private individuals are not required to keep accounts, but in some cases retention periods apply to them as well. The data must remain legible for the entire duration of the retention period. The law stipulates which documents must be kept and which retention periods apply to the respective documents. The commercial code, but also the tax code regulate the statutory retention requirement, some of these regulations are congruent. In Germany, retention periods of two years, six years, ten years and unlimited retention periods apply.

Example:

According to § 257 (1) HGB, as a businessman, you have to keep your trading books, balance sheets, annual financial statements and individual financial statements for 10 years. In addition, there are your commercial letters (copies of the sent ones) and the accounting receipts for the books that are to be kept in accordance with Section 238 (1) HGB .

Tax retention obligation according to AO

According to tax law, more precisely according to § 147 (1) AO, you are obliged to keep the following documents “orderly”:

  • all your books and records, inventories, annual financial statements, management reports, the opening balance sheet, but also all work instructions and other organizational documents necessary for understanding the balance sheet
  • all commercial and business letters received
  • the copies of the commercial or business letters you have sent
  • all accounting documents
  • “All necessary documents” according to Article 15 paragraph 1 and Article 163 of the Union Customs Code
  • and all other documents insofar as they are of importance for taxation

Retention periods for business documents

As a rule of thumb, you can use the fact that you must keep every document that you use for your accounting for ten years. (At most, small businesses or self-employed people who have no employees can deviate from this). Most other documents have a 6-year deadline. We discuss shorter and unlimited deadlines in the separate sections below. For this it is of course important when the deadlines start and end. We will explain this to you later in a separate section.

Retention Periods 1

Meaning of Federal Bonds

Meaning of Federal Bonds

Bonds are very popular with many investors. For conservative investors, they represent the optimal investment option. After all, Germany enjoys an excellent reputation with rating agencies. The reputation of the state issuing a bond plays a decisive role in the valuation of the paper.

  • Federal bonds are used by the federal government to finance the state. See digopaul for definitions of federal.
  • Bonds are also available in very small denominations for small savers.
  • The interest rate is based on the capital market interest rate at the time of issue.
  • The purchase can only be made through a bank.

What are federal bonds?

A federal bond is a fixed income security. In fact, the Federal Republic of Germany is taking out a loan from investors by issuing a bond. Both the issuer risk and the liquidity risk, the risk that the issuer will lose the ability to pay interest or repurchase bonds are marginal. The bond guarantees the buyer a fixed annual interest payment for the duration of the bond.

Bonds are issued to the Traded on the stock exchange. That means they have a “course”. Bonds are always issued close to the market value of 100 percent, for example 99.75 percent or 100.5 percent. The price of 100 percent of a federal bond always corresponds to the nominal value. Bonds are available for as little as EUR 0.01, a size that is, however, irrelevant. Nevertheless, the denomination is chosen so that even small investors can purchase federal bonds.

Bonds are among the so-called hand-safe investments. This means that a guardian can invest the money of his ward in federal bonds, since the risk of loss is excluded.

The yield on a federal bond

If an investor wants to buy bonds for 1,000 euros, the issue price is 100.5 percent, he has to pay 1,005 euros for them. The Federal Ministry of Finance managed to earn money by borrowing during the low interest rate phase. The issue price of the bond exceeded the interest rate. The outstanding creditworthiness of the Federal Republic of Germany justifies the fact that institutional investors in particular accept the loss of interest.

An issue price of more than 100 percent reduces the Return on the bond, less than 100 percent increases the return.

The return is the return that a bond has generated after it has been sold by the investor. It is made up of the interest and the price gain or loss on sale or redemption. If the investor buys the paper at a price of 100.5 percent one year before the bond matures and receives an interest rate of 1.5 percent, the return for this period is 1 percent: 1.5 percent minus 0.5 percent price above 100 .

It also applies to federal bonds that when capital market rates rise, the price of the lower-interest bonds in circulation falls. Conversely, falling interest rates mean that the price of the paper rises. A rule of thumb for German government bonds states that a one percent increase in capital market interest rates leads to a price discount of nine percent for securities that are already placed on the market.

Inflation-linked federal bonds

In addition to the classic bond, the federal government also offers inflation-indexed federal bonds. These offer an interest rate that increases slowly over the years and is linked to an inflation index. The Federal Republic has issued these bonds since 2006. As an alternative to the rising interest rate, a redemption price that rises compared to the issue price can also be part of the bond. The loss of inflation, especially with long-term fixed-income securities, means that when the bond is returned, the investor gets less money back than he invested in terms of purchasing power.

How can you buy federal bonds?

The prerequisite for acquiring a government bond is that the investor has a securities account with a bank, savings bank or broker. Free storage and free purchase from the Federal Debt Administration are no longer possible. In the case of a new issue, the first issue, the securities are sold through the Deutsche Bundesbank commissioned by the finance agency. From the initial issue, federal bonds will be traded on the stock exchange every trading day. Since the trading volume of these securities is very large, there are no outliers in the prices. These are close together in the course of trading, which always means a fair price for the buyer.

For the investor, in addition to the market value that he has to pay, there are also brokerage fees, stock exchange fees and the costs of the custodian bank for the purchase.

Bonds with a ten-year term

Bonds are issued with two maturity options. The short version is ten years, the longer version 30 years. The advantage of the short-term loan is that if the interest rate changes, the investor can get the bond bought back by the federal government relatively quickly. Interest rates do not change significantly in two or three years, so that one can speak of “fast” at ten years.

Bonds with a 30-year term

These papers are particularly attractive in times of relatively high interest rates. They guarantee the investor an attractive dividend over a long period of time. On the other hand, if interest rates rise over the years, these bonds lose a lot of their market value. A sale during the term of the bond becomes uninteresting for the investor; he usually has to wait for the redemption date. However, it is more institutional investors who opt for paper with a term of 30 years.

Overview of federal securities

In addition to federal bonds, the Federal Republic of Germany issues other securities that differ primarily in terms of maturity. The federal securities include:

  • Bonds with a term of 10 or 30 years
  • Federal bonds with a 5-year term
  • Federal treasury notes with a term of 2 years
  • Treasury discount bills 12 months maturity
  • inflation-indexed federal securities

Federal Treasury Bonds, also very popular, and day bonds have not been issued since 2013. In 2017, the federal government also stopped issuing interest-free Treasury notes with a term of six months.

FEDERAL BONDS

Meaning of Bonds

Meaning of Bonds

Bonds is the English name for fixed-income securities, or bonds for short. This type of security certifies the right to a recurring interest payment within a predetermined period of time. At the end of this period, the investor will be repaid the nominal value stated in the certificate.

  • Bonds are used to borrow funds on the capital market and are used by the public sector and companies alike. Corporate bonds are referred to as “corporate bonds”.
  • Traditionally, bonds consist of two sheets. Sheet one, the cover sheet, certifies the right to interest payment, states the term of the bond and the investment amount brought in with the respective certificate.
  • Sheet two, the sheet, contains the coupons. One coupon is redeemed for each interest payment. The coupon shows the due date and the amount of the interest payment.

Legal position of the bond

In contrast to a share, a bond does not serve to increase equity according to digopaul, but only means borrowing with later repayment. In addition to classic bonds with regular interest payments, the following other stocks fall into this asset class:

  • Convertible bond: Can be exchanged for shares in the issuing company within a certain period of time.
  • Warrant bond: bearer bond with the additional right to purchase shares in the company.
  • Indexed bond: In addition to the fixed interest rate, it also contains a variable interest rate component that depends on the development of the underlying index.
  • Floater: bond whose interest rate is variable linked to the development of another interest rate, for example the interbank rate LIBOR.
  • Income bonds: In addition to guaranteed interest, they also offer entitlement to a share in the company’s profits.
  • Zero coupon bonds (zero bonds): The agreed interest rate is deducted upon purchase, the payment is made at the nominal value. If the zero bond runs for one year, the interest rate is one percent and the issue takes place without a front-end load. However, if the investor pays 99 euros for a paper with a nominal value of 100 euros, he will receive 100 euros upon maturity.

Bonds are issued with a certain nominal value, for example 1,000 euros or a multiple thereof, but the price is quoted in percent. It is entirely permissible for the issuer to place the bond on the market at a percentage higher than 100 percent. Bonds from debtors with first-class credit ratings generate additional income in this way. From the time of issue, bonds are traded on the stock exchange. The future course results from supply and demand. The repayment is made at the nominal amount, even if the issue price was above 100 percent.

Domestic and foreign issues

A bond does not necessarily have to be placed on the market in the home country of the issuer. Yankee bonds, for example, are issues of bonds on the US market in US dollars by a company based outside the US. The Japanese market understands samurai bonds to be issued by foreign issuers if the bond is issued in yen. In the case of Uridashi bonds, the bond issued by a foreign issuer in Japan is understood to be in a currency other than the yen.

Calculating the return on bonds

Bonds usually have a fixed interest rate. However, the return does not have to be identical to the nominal interest rate. Depending on whether the acquisition takes place at a price that is above or below the nominal amount, the return also changes. If an investor buys a short-term one with a duration of one year at a price of 100.5 percent on the day of issue and is entitled to an interest payment of 1.5 percent, the return is 1.5 percent interest less an issue surcharge of 0.5 Percent only one percent over the year.

The maturities of bonds

The term of a bond can be up to 30 years. Bunds have maturities of 10, 12, 15 and 30 years. US Treasury Bonds (American government bonds) also have a term of between 10 and 30 years.

Advantages of bonds

In contrast to stocks, bonds are subject to lower price fluctuations. The interest rate depends on the creditworthiness of the issuer. Investors who are more willing to take risks acquire paper from weaker issuers and thus increase the return. Conservative investors fall back on bonds from issuers with the best credit ratings and can thus be sure that they are holding a return in line with the market with the best security in their portfolio.

BOND

Meaning of Stock Exchange

Meaning of Stock Exchange

Stock exchanges look back on a long tradition. The oldest stock exchange was founded in 1409 in Bruges, Belgium. The first German stock exchanges are the Augsburg Stock Exchange and the Nuremberg Stock Exchange, founded in 1540. The Frankfurt Stock Exchange, today the most important stock exchange in Germany and also one of the most important stock exchanges worldwide, was founded in 1585. Exchanges are not only used for trading in securities, but also for organized trading in almost all products. In addition to stock exchanges, there are also special exchanges for raw materials, foreign exchange and in London even a wine exchange, the Liv-ex. For example, CO2 certificates are traded on the European Energy Exchange (EEX) based in Leipzig.

  • Exchanges serve to trade a commodity – be it a commodity, stocks or bonds – in a regulated market environment.
  • The aim of exchange trading is not only the transaction itself, but also the creation of transparency with regard to pricing.
  • Trading on the stock exchanges in Germany is controlled by the Bafin.

How the stock exchange works

Exchanges serve to trade a commodity – be it a commodity, stocks or bonds – in a regulated market environment. The value results from supply and demand. The emphasis here is on the term “regulated market environment”, as the exchange, in contrast to a classic marketplace, follows certain rules for trading. In order for a share to be traded on the stock exchange, the company must meet certain requirements that are regulated in the German Stock Exchange Act (BörsG). According to abbreviationfinder, SX stands for Stock Exchange.

The aim of exchange trading is not only the transaction itself, but also the creation of transparency with regard to pricing. Floor trading, the physical presence of stock brokers in the trading room, was completely replaced in Frankfurt by XETRA trading, computer trading, in 2011.

Stock exchanges in Germany

Trading on the stock exchanges in Germany is controlled by the Bafin. In addition to the Frankfurt Stock Exchange, there are also several regional stock exchanges in Germany. After the closure of the Bremen Stock Exchange, these are still the following marketplaces:

  • Berlin Stock Exchange
  • Düsseldorf Stock Exchange
  • Joint Börsen AG Hamburg-Hanover (including the Hanseatic Stock Exchange as part of BÖAG Börsen AG)
  • Munich Stock Exchange
  • European Energy Exchange, Leipzig
  • Stuttgart Stock Exchange: The Stuttgart Stock Exchange offers investors the opportunity to trade shares in open-ended investment funds. Under certain circumstances, this can be cheaper than purchasing with a front-end load.
  • Tradegate Exchange, Berlin: Tradegate Exchange was the first exchange for fully electronic off-exchange securities trading. Over-the-counter trading enables buyers and sellers to come into direct contact with one another.

The stock market indices

When investors think of the term stock exchange, they primarily think of trading in stocks. The most important indices are therefore also the stock indices. In Germany these are the DAX 30, the M-DAX and the S-DAX. The DAX 30 is made up of the 30 largest German companies, the M-DAX from the next 50 largest companies in the ranking. In the S-DAX, in turn, the following 50 companies belonging to the M-DAX, so-called small caps or smaller public limited companies, are listed. The TecDAX comprises 30 of the 50 largest technology companies.

Indices generally reflect investors’ expectations of a country’s future economic performance. In the US, the best-known indices are the S&P 500 and the Dow Jones Industrial. On the Paris stock exchange, the CAC 40 reflects the performance of the 40 largest companies in France, in Great Britain the FTSE 100 performs this task. The Eurostox 50 indexes the performance of the 50 largest companies within the euro zone.

The trade

Exchange trading cannot be done by every investor himself, but requires the involvement of an official stockbroker. The purchase order for a security is forwarded via the custodian bank and processed in the now fully electronic trading system XETRA. The broker, in turn, virtually brings buyers and sellers of a share together, provided they both have the same asking price. In addition to the brokerage fee for the bank, there is also a commission for the broker when trading securities.

The five most important stock market events

  • On October 28, 1929, the New York Stock Exchange collapsed: the Great Depression had hit the stock exchanges. It was not “Black Friday”, as is often reported today, on October 25 of this year the Dow Jones Industrial Index even rose again.
  • In 1997 the bubble of artificially high foreign exchange rates in emerging markets in Asia. The devaluation of Bath in Thailand was the trigger. The prices on the Hong Kong stock exchange fell by 40 percent.
  • Technology stocks had soared up to March 2000 that ended in a bubble. When the dotcom bubble burst, investors lost over 200 billion euros.
  • Due to the financial crisis, prices slipped massively in 2008. Individual stocks were repeatedly suspended from trading, and the Moscow Stock Exchange kept closing its doors for a few days.
  • In the spring of 2014, the DAX 30 reached its all-time high of over 10,000 points for the first time – proof that the stock market keeps going up in the end.

STOCK EXCHANGE

Meaning of Balance Sheet

Meaning of Balance Sheet

A company’s balance sheet provides information about the origin and use of a company’s capital. The assets, the assets, and the capital, the liabilities, are compared. A profit and loss account is the basis for creating a balance sheet. The balance sheet is a company analysis set for a specific date, while the profit and loss account documents the business success for a specific period. Double-entry bookkeeping is a prerequisite for preparing a balance sheet.

  • The balance sheet provides a legally binding overview of the company’s assets and the business activities carried out in the past financial year.
  • The preparation of a balance sheet is based on the requirements of the German Commercial Code (HGB).
  • The balance sheet is broken down into assets and liabilities.
  • At the end of the day, the balance sheet must be balanced, i.e. on each side, assets and liabilities, the bottom line is the same number.

The tasks of the balance sheet

Short for BS by abbreviationfinder, a balance sheet fulfills different functions. On the one hand, it is used for documentation. It provides a legally binding overview of the company’s assets and the business activities carried out in the past financial year. The equity account provides information about the profit or loss of a company and thus offers options for comparison with previous accounting periods. The detailed list of profits and losses is based on the profit and loss account drawn up beforehand. Last but not least, a balance sheet also contains an information function.

Accounting requirements according to the Commercial Code

A balance sheet cannot be drawn up at the company’s reasonable discretion, but is based on the requirements of the German Commercial Code (HGB). The HGB also regulates which companies are required to be accounted for. This generally includes all corporations as well as sole proprietorships and tradespeople with an annual turnover of more than 500,000 euros or a profit of 50,000 euros. If these numbers are exceeded for the first time, the tax office will request the balance sheet. As long as the claim is outstanding, the conventional profit and loss account can be continued. Freelancers are generally exempt from accounting.

The structure of the balance sheet

Section 266 of the German Commercial Code clearly stipulates how a balance sheet must be structured. The breakdown is made into assets (use of funds) and liabilities (source of funds).

assets

  • Fixed assets, divided into intangible assets, property, plant and equipment and financial assets
  • Current assets, divided into inventories, receivables and securities
  • Prepaid expenses (existing but not yet due receivables)
  • Deferred tax assets (future tax benefits)
  • Difference from asset offsetting
  • Deficit not backed by equity

liabilities

  • Equity, divided into subscribed capital, capital reserve, retained earnings, profit or loss carried forward, net income or net loss for the year and net loss for the year not covered by equity
  • Provisions, divided into provisions for pensions, taxes and other provisions
  • liabilities
  • Prepaid expenses (existing but not yet due liabilities)
  • Deferred tax liabilities (future tax charges)

At the end of the day, the balance sheet must be balanced, i.e. on each side, assets and liabilities, the bottom line is the same number at the end. The shortfall not covered by equity arises when the losses in the reporting period are so high that they exceed equity. Bank balance sheets deviate from the presentation of a normal trade balance sheet and are almost mirror-inverted in the division of the asset and liability positions. A company’s financial assets on the assets side represent liabilities on the liabilities side of a bank. The internationalization of companies has led to an international approach to the structure of the balance sheet according to the International Financial Reporting Standards (IFRS), which deviates from the national requirements for preparing a balance sheet .

Basis of accounting

A balance sheet is based on the “principles of proper bookkeeping”, which in turn are regulated in the HGB. In the end, a balance sheet follows two principles. On the one hand, it is based on the “balance sheet truth” and on the other hand on the “balance sheet clarity”. Truthfulness of the balance sheet means that all business transactions are properly recorded in accordance with the accounting guidelines. The principle of balance sheet clarity states that business transactions and the resulting documentation must be booked in such a way that they are clearly visible and traceable. All facts that are known between two reference dates must be taken into account in the balance sheet.

Delayed business transactions

If a company accounts as of 31.12. one year, it may well happen that the receipt of a service and its payment do not take place in the same year. A classic example is the telephone bill. Calls made in December will not be billed until January. Against this background, balance sheets are rarely drawn up in January, but only two to three months after the balance sheet date. Services that have already been performed on the other side but have not yet been paid for must also be assessed. Nevertheless, the companies have to submit their balance sheets promptly. This fact means that balance sheets are not always one hundred percent clear.

BALANCE SHEET

Meaning of Banking Supervision

Meaning of Banking Supervision

To put it bluntly, the banking supervision of a country ensures the functioning of the respective national financial market. Banking regulation and banking supervision are often used synonymously. Strictly speaking, however, banking regulation sets the legal guard rails within which banks operate. The banking supervisory authority ensures that these are complied with. A distinction must be made between two systems of banking supervision within the euro zone. On the one hand, this task lies primarily with the national central banks. The European Banking Authority (EBA), based in London, only develops uniform standards for a harmonious approach. However, the European Central Bank (ECB) will take over control of the banks from autumn 2014.

  • Section 6 of the Banking Act (KWG) regulates the tasks of banking supervision in Germany.
  • In order to monitor ongoing business operations, it is primarily important to check that a bank has sufficient liable equity capital.
  • If a bank violates guidelines or requirements, various sanctions are available.

The tasks of banking supervision

Section 6 of the Banking Act (KWG) regulates the tasks of banking supervision in Germany. It stipulates that banking supervision, in Germany split between the Bundesbank and the Bafin, must counteract possible grievances in the financial services sector. These grievances include events, which

  • could jeopardize the deposits of customers entrusted to the banks;
  • lead to the fact that the business activities of a bank according to KWG do not exist, or
  • can bring considerable disadvantages to the entire economy.

The control of the institutes is primarily based on the type and scope of their business activities. The legal basis for the control is based on the KWG, which aims to counteract possible undesirable developments in advance. The division of tasks between Bafin and the Bundesbank makes the difference between regulation and supervision clear. The Bafin issues the necessary guidelines with regard to the banking business, the Bundesbank monitors their implementation.

The legal basis

In addition to the KWG, there are other legal bases for the regulation and supervision of banks in Germany. These include:

  • the Bundesbank Act (BBankG);
  • the German Solvency Regulation (SolvV) as the German implementation of the Basel II requirements;
  • the minimum requirements for risk management (BA).

Since credit institutions have to meet special requirements for the establishment of a new company, supervision not only relates to the monitoring of ongoing business operations, but also to compliance with the requirements in the case of a new establishment.

The monitoring of the operational business

In order to monitor ongoing business operations, it is primarily important to check that a bank has sufficient liable equity capital. In order to be able to absorb the credit default risk, at least eight percent of the loans granted must be available as equity. Another point is the monitoring of liquidity. The credit institutions must invest their funds in such a way that they are able to pay at all times. The Bafin also checks whether the bank’s internal risk management works sufficiently so that a bank can identify possible errors at any time and take active countermeasures.

Sources of information

On the one hand, the banking supervisory authority examines the annual financial statements. However, since the one-year period is too long to identify possible dangers in good time, the institutes must present monthly IDs. These contain the most important balance sheet figures and the deviations from the previous control period. The reporting requirement is also subject to large loans, million dollar loans and loans to organs as well as investments with a volume of over ten percent. In addition, banks must notify the supervisor of changes in management or the branch network.

Measures to implement

If a bank violates guidelines or requirements, various sanctions are available. These range from fines to the complete closure of a bank. If the management’s ability to run a bank is deemed to be insufficient, the supervisory authority can demand that it be dismissed and replaced by a special representative.

BANKING SUPERVISION

Meaning of Appreciation and Depreciation

Meaning of Appreciation and Depreciation

The appreciation or devaluation denotes the deliberate rise or fall in the rate of one currency against another. The background for the so-called revaluation (appreciation) or devaluation is to be found in the foreign trade relations of the respective countries, or in the foreign exchange market itself.

  • Appreciation and devaluation can arise due to the supply and demand for a currency, but also due to targeted intervention by the respective central bank.
  • The devaluation of a currency can stimulate exports and lead to economic advantages in the short term.
  • The appreciation of a currency can have a long-term negative impact on an economy.

What are the exact causes of appreciation and devaluation?

On the one hand, for example, a devaluation can result from a country’s economic situation deteriorating drastically. Participants in the foreign exchange market lose confidence in the country and its currency. The value of the currency against other currencies falls, from the point of view of the country concerned there is a devaluation. Conversely, the currencies of the other countries will appreciate.

Another situation arises when a country’s central bank deliberately pushes the value of its own currency down against a foreign currency. The aim of this measure is to stimulate exports by making goods cheaper for foreign countries.

Before the introduction of the euro, Italy, for example, used the instrument of devaluation in phases of weak economic activity. Devaluation by the common currency is no longer possible within the euro zone, even if the purchasing power of the individual countries diverges widely.

The story of appreciation and devaluation

Originally the US dollar was linked to the gold price (gold parity). In 1944, the International Monetary Fund (IMF) created the system of fixed exchange rates depending on gold parity. The gold parity of the US dollar made it possible to determine how the individual currencies relate to the US dollar. Due to the dependence on the gold price, the relationship between the individual currencies was fixed.

Using the D-Mark as an example, however, it can be shown that this system could not last. In May 1949 the IMF fixed the value of one dollar at 3.33 DM. However, the value of the D-Mark fell, and by September the value of one US dollar was 4.20 D-Mark. The central bank had to intervene more and more frequently in the years that followed. In 1969, the fixed exchange rates had to be relaxed for the first time. In December 1971 the US abolished the gold parity of the US dollar. In March 1973, the member states of the European Economic Community (EEC) began collectively to unlock currencies against the US dollar.

In 1979 the European Monetary System was introduced with the ECU. This synthetic currency was based on the D-Mark. With the introduction of the euro, the USA was ultimately faced with an economic area with a single currency, which developed tremendously with the appreciation or devaluation of its currency against other currencies.

The consequences of revaluation and devaluation

The devaluation of a currency has positive effects for the respective country in the short term. The economy is stimulated. Conversely, imported goods are becoming more expensive. This, in turn, can mean that similar goods produced in the domestic economy are in greater demand.

The devaluation of crude oil becomes problematic. The US dollar is still the key currency on the oil market. The devaluation of a currency against the dollar leads to a corresponding increase in the price of a large part of the energy costs. A devaluation also leads to foreign travel becoming more expensive, a fact that is seldom taken up positively by the population.

In the long term, however, an appreciation can lead to a deterioration in the labor market. With falling exports due to the rise in the price of goods abroad, the consequence of the revaluation can mean a decline in production, which in turn leads to the exemption of workers.

The appreciation or devaluation of a currency also affects debt servicing. Regardless of whether they are private loans or loan turns the public sector, the debt service becomes cheaper when the loans were taken out in foreign currency and its currency was revalued. In this case, the borrower will need less money to repay the loan.

Appreciation and devaluation as a risk factor

According to digopaul, the calculated appreciation or devaluation of a currency against other currencies can turn out to be a downward spiral. If one currency area also responds to a devaluation of another currency with a devaluation, this could lead to a downward spiral between these two currencies. Especially for an economic area like the European Union with a clear gap in economic output and average income, the effects of an appreciation or devaluation are drastically different.

APPRECIATION AND DEPRECIATION

Meaning of Asset Management

Meaning of Asset Management

The aim of asset management (short for AM by abbreviationfinder) is to further increase existing assets – and to do so as efficiently and with as little risk as possible. The English word “asset” means “fixed assets”. Asset managers look after private as well as corporate assets and try to increase them through various forms of investment. As a rule, investments are made in funds. This requires extensive know-how and skillful risk management. Traditionally, the financial services of asset management are primarily used by investors with larger capital assets (from 50,000 euros). Small investors, on the other hand, have little chance of finding a private asset manager.

  • The decisive advantage of serious asset management lies in the know-how advantage of asset managers over private individuals and companies.
  • While pure investment or investment advisors only take on an advisory role, asset managers usually also make investment decisions.
  • As part of asset management, the assets of private investors and business customers are usually invested in funds.

What does asset management bring?

The decisive advantage of serious asset management lies in the know-how advantage of asset managers over private individuals and companies. Thanks to their market knowledge, asset managers can make long-term, profitable investment decisions even in rapidly changing markets. You have a good overview and – in contrast to private investors, who often tend to make impulsive decisions – are able to make long-term prudent decisions.

These tasks are carried out by asset managers

While pure investment or investment advisors only take on an advisory role, asset managers usually also make investment decisions. They relieve companies and private investors from a whole range of tasks. The classic range of tasks in asset management includes the following points in particular:

  • Information and advice:Asset managers initially have an advisory role. They inform their customers about lucrative investment opportunities.
  • Individual strategy development:Asset managers work out an individual investment strategy together with clients. This is essential because every customer has their own needs. In particular, the investor’s willingness to take risks and personal goals determine the investment strategy.
  • Market observation:Market observation or market analysis is a central component of asset management. The respective managers not only have to have in-depth economic knowledge, but also know current market developments and identify trends as early as possible.
  • Review of investment options:Asset managers review investment products either individually or using statistical methods. In this way, they determine the investment options that best suit the wishes and needs of customers – be it stocks, real estate or life insurance.
  • Diversification and risk management:The aim of asset management is to generate the highest possible return on the assets invested at a comparatively low risk. Risk management is therefore one of the fundamental tasks of asset management. There are a number of methods available to asset managers to limit the risk of an investment. In addition to assessing the security and profitability of certain investment products on the basis of one’s own know-how, diversification plays a decisive role in risk management. Diversifying means: The assets to be invested are distributed across several promising forms of investment. This makes the investment strategy less susceptible to crises and leaves room to counteract possible wrong decisions.

The role of funds in asset management

As part of asset management, the assets of private investors and business customers are usually invested in funds. A fund is nothing more than a collection of different stocks, real estate or bonds that are financed with the capital of various investors.

Anyone who participates in a fund with equity becomes a co-owner and may receive a dividend distribution. If you invest in a package of shares – in contrast to buying shares in a single company – the risk is automatically diversified. A fund always consists of a bundle of securities. If the securities of some companies do not perform as expected, this can be offset by the positive development of others. However, one hundred percent investment security cannot be guaranteed even with funds.

In principle, a distinction is made between mutual funds and special funds. While special funds are aimed at companies, banks and the like, public funds can be used by all investors.

Serious asset management: independence and transparency

Serious asset management is characterized by independence. Ideally, an asset manager is not tied to specific products, but rather chooses investments based solely on the client’s needs. Commissions or other remuneration should also not be paid when brokering certain funds. Bank asset managers should at least have access to the entire product range of the respective institution.

Regardless of whether the services of an independent asset manager or the asset manager of a bank are used: Asset management should be characterized by transparency. This means that potential returns and risks are discussed openly. In addition, any costs and administration fees should be conveyed transparently.

ASSET MANAGEMENT

Meaning of ETF

Meaning of ETF

According to abbreviationfinder, ETF is the abbreviation for “Exchange Traded Fund”. Accordingly, ETFs are not traded through the investment companies that set up the respective funds, but on the stock exchange. The price of ETFs is based solely on supply and demand, i.e. purchases and sales on the stock exchange. The fund company’s issuing surcharge does not apply. The support is not provided by fund managers, but by market makers. Their task is to determine the buying and selling prices, which are published continuously during the trading day. Therefore, the development of the ETFs is very transparent.

  • The majority of exchange-traded funds are offered as index funds, which is why both terms are often used synonymously.
  • In most cases, ETFs are based on stock indices due to their large number.
  • One of the great advantages of ETFs over other fund investments is the flexibility of stock exchange trading.
  • The risk of an exchange traded fund depends on the type of fund and the underlying indices.

Participation in index developments

The majority of exchange-traded funds are offered as index funds, which is why both terms are often used synonymously. Index funds are passively managed, which means that they track the development of a specific underlying index. Actively managed ETFs that invest the fund capital in constantly changing, successful values ​​in order to optimize returns and beat indices are extremely rare.

In most cases, ETFs are based on stock indices due to their large number. The best-known share index in Germany that a listed fund can use for orientation is the German share index DAX. This index summarizes the securities of the 30 stock corporations with the highest turnover in Germany. But there is also the possibility of replicating real estate, money market or other indices.

Indices shown

In principle, an ETF can track any index. Depending on the type, they differ for example:

  • Market-wide indices with stocks from all industries and regions (e.g. the MSCI All Country World Index, which takes industrialized and developing countries and small and large companies into account)
  • Region indices with values ​​from individual economic regions (for example the MSCI Europe Index, which only includes European stocks, or the MSCI Emerging Markets Index, which only includes stocks from developing countries)
  • Sector indices that only show the development in a certain branch of the economy (for example the Euro Stoxx Telecommunications Index)
  • Strategy indices that focus on specific industries, growth rates, or time-based data

Advantages of ETFs

One of the great advantages of ETFs over other fund investments is the flexibility of stock exchange trading. The listed funds can be quickly liquidated on the stock exchange, so that investors have access to the sales proceeds after just a few days.

Save fees

Since passively managed ETFs follow changes in the indices, active management that constantly monitors the market and reacts to market changes with new investment strategies is not required. Fund managers don’t have to be paid. The costs are limited to the exchange fee and the total expense ratio charged to the fund and are significantly lower than when purchasing actively managed fund units. This means that passively managed ETFs are also of interest to private investors.

Disadvantages compared to active funds

A disadvantage of passively managed ETFs compared to actively managed funds is that the return is firmly linked to the performance of the underlying index. Ultimately, you aim to map the base index as precisely as possible. Active funds, on the other hand, aim to outperform their benchmark. To achieve this, fund managers change the composition of the fund and fill it with the strongest values ​​if possible. In practice, however, it is seldom possible to permanently outperform the index.

Risks and selection of ETFs

The risk of an exchange traded fund depends on the type of fund and the underlying indices. Safe investments include ETFs that fully track a market-wide index. These funds are characterized by a large diversification of the fund capital. The strength of the index also influences the safety of ETFs. Nevertheless, a risk of loss in stock exchange transactions cannot be ruled out. Before investing in exchange-traded funds, it is worth comparing the offers.

ETF

Meaning of Social Capital

Meaning of Social Capital

According to DigoPaul, the concept of social capital can be analyzed from two perspectives: accounting and sociology. As an accounting term, social capital is the value of the goods or money that the partners contribute to a company without the right of return.

In this way, the share capital (which is recorded in an accounting item) grants the partners different rights depending on their participation and represents a guarantee against third parties. This is a stable figure, although negative results can lead to bankruptcy and then the company will already have the necessary resources to meet its obligations to third parties.

In this sense, it is also important to establish that there is also what is known as minimum social capital. This term is used to define the capital that every company must maintain at least. It is important to underline that this will be one or the other depending on the type of company it is, in this way a public limited company must have a much higher minimum share capital than one that is limited liability.

In another sense, the capital stock is a liability (debt) of the company towards the partners. To modify this contribution, a series of legal procedures must be followed. It is necessary to distinguish between the notions of capital stock, equity (the total assets and liabilities of the company) and equity (the effective difference between assets and liabilities).

In addition to all of the above, we have to bear in mind that within a company the increase in capital stock can take place. This is achieved through different actions or situations such as, for example, monetary contributions, non-monetary contributions, by transformation of profits or reserves as well as by offsetting credits against society.

In the same way, it is also possible that a specific company suffers the reduction of its share capital. In this case, the circumstances that may lead to this event are the return of contributions, the increase in the legal reserve, the forgiveness of passive dividends or with the clear objective of eliminating losses.

The last mentioned fact is decided to carry out with the intention of achieving that the existing balance between what is capital and net worth is recovered. Hence, this compensation for losses can be achieved either by reducing the accounting dimension of the company or through the profits of the company.

For sociology, social capital is that which enables cooperation between two parties. The notion does not necessarily imply something positive, since contacts between people can lead to negative events (such as mafia societies, for example).

In other words, social capital implies the sociability of a human group, with the aspects that allow collaboration and its use. Sociologists emphasize that social capital is formed by social networks, mutual trust, and effective norms, three concepts that are not easy to define and that may vary according to the analyst’s conception.

Social Capital

Meaning of Captain

Meaning of Captain

Captain is a term that comes from the Latin word capitanus and that allows the ranking officer to be named below the commander and superior to the lieutenant. At a general level, the concept is used to refer to the person who heads a troop, the commander of a warship and the military leader.

The captain is the most responsible of a ship before the crew, the passengers and the authorities. It is the person in charge of directing the navigation, although with the support of other people. Nowadays, thanks to telecommunications, the captain also has the collaboration of the ground staff.

Some example sentences: “The captain of the cruise ship will be judged for the oil spill as he took an unauthorized navigation route “, “Please ask the captain how long until the port”, “The sailors are very far away. I am pleased with the new captain, a simple and kind man ”.

Outside of nautical, the captain is the one who directs any crusade or project. In this sense, the term can be used as a synonym for leader: “Hundreds of NGO volunteers came to town, led by a renowned pediatrician”, “The captain of the bandits was caught a few kilometers from the scene.

In the field of sport, the captain is the one who represents the members of a team during the development of a competition. He generally acts as a spokesperson for the rest of the players and is the only one who has the right to address the referee and the judges. The captain is usually identified with a ribbon or some badge.

It should be noted that in the teams that play the Davis Cup tennis, unlike other sports, the captain is a coach or technical director, and not a player.

According to DigoPaul, Captain Tsubasa is the name of a manga or a cartoon series of Japanese origin, created in 1981 by Yoichi Takahashi, a renowned cartoonist. It is about the life of Ozora, a virtuous soccer player who discovered his passion from a very young age. Throughout the story, his path to the Japanese national team is narrated, which begins with his participation in the school team. Although the series uses many symbolic and fantastic elements, it places special emphasis on the importance of teamwork and friendship.

Another fictional character associated with the title of captain is Jack Sparrow, from the series of films ” Pirates of the Caribbean “, in which he is played by the acclaimed American actor Johnny Depp. The first part of the saga was published in 2003 and, given its great success, three more films have been released. On the other hand, Captain Sparrow has also starred in various children’s books that narrate his adolescence, belonging to the series ” Pirates of the Caribbean: Jack Sparrow “.

Edward John Smith is the name of the only captain of the Titanic and he is a character as famous as he is controversial. Thanks to the blockbuster film adaptation of the tragic story, made by James Cameron, millions of viewers unaware of the details of the sinking of the ocean liner put a face on Captain Smith, and could feel his regret after the fatal accident that claimed the lives of so many. In the movie, guilt drives him into a state of shock and he seems to lose the will to move on.

However, some versions suggest that it was not a series of absurd oversights and inattention on the part of the captain and his crew, but that it was an authentic plot that sought to eliminate three well-defined characters who were opposed to the creation of the Federal Reserve: John Jacob Astor, Isador Strauss and Benjamin Guggenheim.

Captain

Meaning of Capital

Meaning of Capital

The term capital comes from the Occitan language. In architecture, the upper sector of a pilaster or column is called a capital, which decorates it and complements it as a molding.

According to DigoPaul, the capital is an architectural element that transmits the loads from the horizontal entablature to the pilaster or column. It also allows the transition of those parts between which it is located.

The Egyptian capital is the oldest known. According to its figure, it is called papiriform (it imitates the papyrus plant), palmiform (inspired by date palms), hatoric (representing the goddess Hator) or lotiform (created in honor of the lotus flower).

In Persia capitals with double-headed figures were used. The Romans and Greeks, for their part, developed different kinds of capitals: Ionic, Doric, Tuscan, and others. Then came the Islamic capital, the Byzantine capital, the Gothic capital and other types of capitals.

That without forgetting that within what are the Muslim capitals we can also find several types such as the following: the Caliphate capital, the Tuluní capital, the Taifa capital and the Nasrid capital.

Of the same there are many other important capitals within what is the history of art and architecture. Thus, for example, we come across the so-called pencas capital, which is a type of Muslim capital that was inspired, to some extent, by the Corinthian. However, it comes to simplify that in such a way that it does not bet on representing all the acanthus leaves but simply what its beginnings are, the leaves.

In addition, there is also the capital of the hornet’s nest. It is another of the Muslim type that is characterized by being composed and by being inspired by Roman architecture. If it has that name, it is because it has a large number of holes, created with a trephine.

Of course, we must not forget the so-called curved capital, which dates back to the 12th century. It seems that the Almohads were the creators of it, which is characterized by its incorporation of scrolls, but between the two it includes a series of horizontal bands like ribbons. And hence its name.

But the wealth of Muslim art doesn’t stop there. Thus within it is also the ataurique capital, where both plant motifs and pine cones take center stage, and the capital of muqarnas, where different compositions of stalactites take on relevance.

At a general level, it can be said that a capital is made up of an talus (the molding that is at the base and that develops around the shaft of the column), a drum (the body of the capital) and an abacus (the board that serves as a top and supports the beginning of the lintel or arch).

It is important not to confuse a capital with a spire: the conical or pyramidal top of a tower. In any case, the dictionary of the DigoPaul recognizes both terms as synonyms.

For botany, finally, the capital is the sheath or sleeve forming the leaves of certain plants in the stipe.

Capital 2

Meaning of Capitol

Meaning of Capitol

Before proceeding to know the meaning of the term capitol, it is essential to discover its etymological origin. In this case, we can determine that it comes from Latin, exactly from the word “Capitolium” and this in turn derives from the noun “caput”, which is equivalent to “head”.

A capitol is a building where the Legislative Power of a State works. The term is used in some cases with reference to the Executive Branch building.

The United States Capitol, for example, is located in Washington DC and allows the functioning of the two chambers that make up the national congress. The original design of the building was done by William Thornton, although later other architects directed various modifications.

The United States Capitol complex occupies more than 110 hectares and includes multiple offices with offices, a library and the headquarters of the Supreme Court of Justice.

The National Capitol of Havana, for its part, is a place that was born to house the two chambers of the Cuban Congress, although, since the socialist revolution, it has been the headquarters of the Academy of Sciences and the Ministry of Science, Technology and Environment.. The construction of the building ended in 1929 and had Eugenio Raynieri Piedra as responsible.

According to DigoPaul, the Capitol of Toulouse is an example of a capitol linked to the Executive Branch. This building, unlike those associated with legislative bodies, is the seat of the local council.

This Capitol of Toulouse we can determine that it began to be built in the 12th century, specifically in the year 1190. It has really significant spaces such as the Hall of the Illustrious, the courtyard of Henri IV or its Greater Tower.

To all those already mentioned we can also add the Texas Capitol, which is currently the seat of the government of that place. In the second half of the 19th century, specifically in 1888, this building was built, located in Downtown, which is identified by having a marked Renaissance style.

It has been restored on several occasions and its domes and mosaics stand out.

In this list of capitols we cannot overlook either that of Colombia, which is the seat of the National Congress. It is located in the Plaza de Bolívar, it has become one of the most important buildings in Bogotá and has its origin in the 19th century. It was built exactly between 1848 and 1926, it is declared a National Monument and is made of quarry stone.

It has three floors and has especially significant rooms such as the Elliptical Room, where the plenary sessions take place; the Bocayá Room, dedicated to the presidency of the chamber or the Senate Room.

Other known capitols are the Capitol the State of Arizona, the Capitol of the State of Michigan and the Capitol of the State of Colorado.

It is important to mention that, according to the DigoPaul in its dictionary, the idea of ​​a capitol can also refer to an acropolis: the high and fortified sector that, in ancient cities, concentrated public buildings and temples.

Capitol

Meaning of Capitulation

Meaning of Capitulation

The Latin word capitulatio came to Castilian as capitulation. The first meaning mentioned by the dictionary of the DigoPaul refers to an agreement established between two or more parties on a subject that is usually transcendent or critical.

In the field of law, there is the matrimonial capitulation: the agreement established by the spouses, either before the marriage or afterwards, to determine how the couple’s economy will be organized and how the succession agreements will be carried out.

In these marriage agreements, what the spouses will do is establish whether they are going to have a community property regime or a property separation regime. In the same way, it must be established that they have to be carried out before a notary who will give them a deed form. The usual thing is to do them before getting married or just after going through the altar.

To all this we must add that these matrimonial agreements can be modified at the moment that the two parties involved want to change the aforementioned economic regime.

According to DigoPaul, capitulation is also the arrangement that establishes the surrender of a force or army. These agreements usually consist of several chapters that set the conditions of the case.

The capitulation supposes that a force recognizes its defeat and desists to continue fighting. Simultaneously it grants its possessions to the other side in exchange for the fulfillment of certain matters, which are agreed by the bosses and must be complied with by the subordinates.

The Capitulation of Ayacucho, the Capitulation of Potosí, the Capitulation of Toledo and the Capitulation of Franzburgo are some capitulations that, due to their importance or scope, have remained in history.

There are capitulations that go beyond a surrender and that imply other agreements, as we mentioned above. Conquest capitulation was called, in this framework, the contract established by a monarch and a private individual to keep a territory and recruit soldiers.

Within history we have to establish that, without a doubt, one of the most important capitulations of this type have been the so-called Capitulations of Santa Fe. They were called thus because they were signed in the Granada town of Santa Fe.

On April 17, 1492 it was when the Catholic Monarchs carried out the same where they came to collect the agreements that they had reached with Christopher Columbus regarding the expedition that he intended to carry out and that would lead to the discovery of America. The editor of the same was the secretary of the monarchs, Juan de Coloma.

Among the most significant agreements, we can highlight that they included granting Colón one-tenth of the benefits he obtained; being appointed admiral, viceroy and governor general of the lands he discovered; the tithe of the merchandise that he earned or that was in the lands that he conquered…

The capitulation of the conclave, on the other hand, consisted of the signing of a document to reflect the agreement reached between the members of the College of Cardinals at the beginning of a conclave; This agreement established how the relations between the cardinals and the future pope would be.

Capitulation

Meaning of Chapter

Meaning of Chapter

A chapter is a division that is made in a book or other type of written document to facilitate reading and the order and integration of the contents. The term has its origin in the Latin word capitulum.

Each chapter, therefore, supposes a part or section within a work of a certain length (if the work is very short, the division into chapters is not justified). The length of the chapters varies according to the intentions and needs of the author and the work. In fact, within the same book, for example, the duration of each chapter can differ considerably from the rest.

Authors often number chapters in order of appearance: Chapter 1 is followed by Chapter 2, and so on. Some chapters are not numbered and are considered as a different subdivision (the introduction, the epilogue, etc.). Certain writers, on the other hand, do not number the chapters, but give each a title.

For example: “As soon as I finish reading the book, I’ll lend it to you: there are fourteen chapters and I’m on the eighth”, “The last novel by this author bored me and I abandoned it in the fourth chapter”, “The chapter of death of the captain has fascinated me ”.

According to DigoPaul, the notion of chapter can also be used in other types of works that go beyond written material. The television series, whether novels, comedies or otherwise, can be divided into chapters: “Did you see the last chapter of the novel? Dr. Romerson kidnapped Mary and took her to his house in the mountains ”, “ There are three chapters left until the end of the soap opera that has conquered the Brazilians ”.

In some Spanish-speaking regions this term is used as a synonym for episode when talking about television series, although both words should be understood in this context. A work divided into episodes can be described as episodic, and this classification is widely used in the field of video games, especially those that are distributed digitally; the market for downloadable titles represents a considerable saving of resources for a developer, and splitting a project into several installments can help improve future content through the opinions each one receives.

Within the family of the term chapter is the verb recapitulate, which can be defined as remembering in an orderly way what has been expressed in writing or orally. It is a word typical of formal language, not widely used in everyday speech. If one delves into its etymology, it is discovered that it is possible to distinguish three lexical components from Latin: re (indicating a reiteration, a journey backward), caput (which is translated as head) and -ción (a suffix associated with the actions and effects).

In this way, a term is obtained that speaks of going backwards, towards the beginning of something, towards an important point in time; in its Latin version, its approximate meaning is to remember a pact or agreement. This leads us to the capitular verb, which indicates the creation of a pact or agreement by a group of individuals. Continuing with this analysis in reverse, the word chapter is formed from caput and the suffix -ulum, used for the construction of diminutives.

In its etymological sense, chapter refers to the distribution of command, the division of power, of the most important part (the head). It is possible, then, to understand that today it is associated with the partitioning of an artistic work or a document into ordered and coherent fragments.

Chapter

Meaning of Boss

Meaning of Boss

The term capo comes from an Italian word that can be translated as “head”. An Italian term that has its origin in Latin. And it comes from the word “caput” which can be translated as “head”.

According to DigoPaul, the concept is often used with reference to the leader of a mafia organization or a criminal gang.

For example: “The local police managed to capture the drug lord last night”, “The writer was threatened after publishing a book where he denounced the Sicilian mafia boss”, “Several members of the gang have already fallen: now we are going for the boss”.

Speaking of bosses, we must highlight a fundamental figure in this sense. We are referring to Alphonse Gabriel Capone (1899 – 1947), better known as Al Capone. He was a famous American gangster, he was the most important mob boss during the 1920’s and 30’s and for a long time he was one of the most wanted criminals by the FBI.

Specifically, agent Eliot Ness and his group, known as “The Untouchables”, were at all times behind this character and finally managed to arrest him so that, immediately afterwards, he was sent to jail for tax evasion. Specifically, he spent most of his sentence in the famous Alcatraz prison.

Precisely about the world of the bosses there are numerous films, already classics of the cinema that shape the saga of “The Godfather”. The first part, the one that gives title to the series, was released in 1972 under the direction of Francis Ford Coppola.

Marlon Brando, Al Pacino, Robert Duvall or James Caan are the actors who lead the cast of this feature film that revolves around a family of gangsters, the Corleones. The boss of it is none other than Don Vito Corleone, who is the main command of Cosa Nostra in New York.

In several countries, the idea of ​​a boss is also applied to appoint the head or guide of any group or entity: “If you want to obtain some benefit, I suggest you speak with the company’s human resources boss”, “Pereyra is the boss of this team for several years ”, “ I don’t pretend to be the boss of the association, I just want you to pay attention to my projects ”.

On the other hand, a person who has extensive knowledge of a certain topic, who has a lot of prestige or who accumulates numerous achievements can be named as a capo: “Tomorrow a capo in sociology will come to the university to give a lecture”, “LeBron James the boss of the NBA today”, “My uncle is a kingpin: he has won five literary awards for his stories and novels.

If the word is accented in the letter O (hood), it refers to the structure that covers the engine of a car. In this case, the notion derives from the French bonnet: “Open the hood so I can see where the fault may be”, “Yesterday a branch fell on my car and dented the hood”, “I’m going to open the hood to check the oil level ”.

Boss

Meaning of Capoeira

Meaning of Capoeira

Capoeira is not a term that is part of the dictionary prepared by the DigoPaul. The concept, however, is frequently used in our language as this is the name of a martial art of Brazilian origin that enjoys great popularity in many countries.

Capoeira is a combination of acrobatics, dancing, and other bodily expressions. Its origins date back to the beginning of the 16th century, when it was developed by African descendants who took influences from local aboriginal cultures.

In 2014, capoeira was included in the Intangible Cultural Heritage Site of UNESCO. The discipline can be developed in a sporting and acrobatic way or as a fighting style. At a general level it is characterized by the movements of the legs and arms and the jumps.

Traditionally capoeira was practiced to the rhythm of the birimbao, a stringed instrument. Nowadays it is common for percussion instruments to be used as accompaniment.

According to DigoPaul, the practice of capoeira is carried out in “rodas”: the musicians and capoeiristas form a circle while two practitioners face off in the “jogo” (the game). While these two people engage in a fight (without physical contact), the others clap and sing.

There are, however, different styles of capoeira and multiple techniques. Numerous “fighting committees” have been created around the world that organize the practice of capoeira and confront its exponents. Beyond the capoeiristas, there are many mixed martial arts fighters who appeal to capoeira movements.

Other interesting aspects about capoeira are the following:
-The minimum size that the circle where the roda will take place must have is 3 meters.
-The teachers who teach capoeira are committed to instilling in their students a series of important values. Hence, more and more people talk about the advantages of this art. Specifically, they instill in them intelligence, respect, freedom, security and responsibility.
-One of the most important movements in capoeira is the one called Ginga, which basically consists of swinging.
-Movements such as the Aú Batido, which is an evasive cartwheel that later becomes a block or kick, also take center stage in capoeira.
-With regard to attacks, sweeps and kicks are relevant in capoeira, without forgetting what punches and blows to the head are.

The world of cinema has had a special interest in capoeira. For this reason, there are several films that revolve around it. We are referring to films like “Besouro”, which tells the story of one of the most important capoeiristas in the history of that art in Brazil, such as Besouro Mangagá, or “Only the strong”.

However, other audiovisual productions on capoeira such as “Uma vida pela capoeira”, “Secret history of Bahia” or “A capoeira iluminada” should not be overlooked.

Capoeira

Meaning of Whim

Meaning of Whim

The etymology of capricho leads us to capriccio, a word from the Italian language. A whim is a decision or a demand that is arbitrary and whose origin is found in a whim.

For example: “I’m not going to sell my car because of your whims”, “I’m sick of your whims!” , “My daughter bought a pink wallet on a whim and then never used it.

The concept also applies to the element, the animal or the individual that is the object of a whim: “The singer the new whim cost thirty thousand dollars”, “The model was just another whim of the Hollywood star”, ” I explained to my son that dogs are not a whim ”.

For psychology, a whim is an idea that a person develops outside of logic and reasonableness. These are thoughts that are not constructed according to ordinary rules and that are often linked to the eccentric.

According to DigoPaul, when whims are adopted by children, they often speak of a tantrum or tantrum. A 4-year-old may cry and scream if his parents don’t indulge his whims. In the case of pregnant women, cravings are known as the desires that they try to fulfill in a capricious way.

In addition to all the above, we cannot overlook the fact that in the city of Madrid there is a very important place that bears the term that we are dealing with in its name. We are referring to the famous Parque del Capricho, located in the Alameda de Osuna neighborhood.

About 14 hectares of extension has this place that has its origin in the eighteenth century. And it was in 1787 that the Duchess of Osuna ordered it to be built. Construction that would last from then until 1839.

It should be noted that it is considered the only existing Romanticism park in the Spanish capital and has been declared an Asset of Cultural Interest. To all the above, it must be added that in it you can admire special corners such as the Casa de la Vieja, the Palace of the Dukes of Osuna, the Swan Pond, the Fountain of the Dolphins or the Obelisk called Wheel of Saturn.

Among the most peculiar constructions that it has on its grounds is the bunker or refuge of Position Jaca. This, which was erected during the Civil War, was the Headquarters of the Republican Army.

In the field of music, a whim is called an animated composition of a free nature. There are also quirks in architecture: in this case, they are decorative elements that arise from the imagination and are used in gardens.

In the same way, in the musical field, we must highlight a composition for classical guitar that is entitled “Arab caprice”. It was written by the Castellón-born musician Francisco Tárrega in 1892 and throughout history it has been performed by the best guitarists in the country, such as Andrés Segovia from Jaén.

Whim

Meaning of Capricorn

Meaning of Capricorn

Before proceeding to determine the meaning of the term Capricorn, it is necessary to know its etymological origin. In this case, we can establish that it is a word that derives from Latin, specifically from “capricornus”, which is the result of the sum of two components of that language:
-The noun “caper”, which can be translated as “goat”.
-The noun “cornus”, which is equivalent to “horn”.

Hence, it can literally be established that it means “goat’s horn.”

The notion of Capricorn has several uses. There is a constellation called Capricorn or Capricornus, which is usually represented as a goat with a fish tail. Astronomy points out that, among the stars that make up this constellation, are Alpha Capricorni (also called Al Giedi), Beta Capricorni (Dabih), Gamma Capricorni (Nashira) and Delta Capricorni (Deneb Algedi).

The astrology is Capricorn as one of the signs of the zodiac. A person who was born between December 22 and January 1 belongs to this sign: that is, they are Capricorn. For example: “My son is a Capricorn and my husband is Aries”, “You can tell that you are a Capricorn”, “I would like my grandson to be a Capricorn like me”.

Taking into account that it is a horoscope sign, it must be established that it is determined that the people who have it have a series of marked personality characteristics. Thus, it is established that they have a strong character, that they hate monotony and boredom, that they place a lot of value on love and that they can be, at times, very cold.

In the same way, it is indicated that they never give up, that they always have to have goals to fight for and that they are faithful. Not forgetting that they identify as shy and, above all, reserved.

In addition, it has been established that the lucky number of Capricorns is 4 and that the colors that most identify them are blue, yellow and brown.

Many are the famous people that belong to this sign of the horoscope. However, some of the most significant are chef David Muñoz, actor Jude Law, model Kate Moss, actress Adriana Ugarte, pilot Lewis Hamilton…

According to DigoPaul, Capricorn is one of the cardinal signs. It has a feminine nature, is part of the earth element and has Saturn as its governing star.

In the southern hemisphere, on the other hand, is the Tropic of Capricorn. It is a parallel that is south of the equator.

It can be said that the Tropic of Capricorn is the imaginary line that indicates the southernmost points in which the Sun is able to occupy the zenith at noon.

Capricorn, on the other hand, is the name of a project that the National Institute of Aerospace Technology (INTA) “Esteban Terradas” of Spain carried out between 1991 and 2000. Through this plan they worked on the development of a rocket that used solid fuel as a propulsion method.

An album by María Isabel released in 2006, a character from the anime and manga titled “Saint Seiya” (Capricorn Shura) and a movie directed by the American Peter Hyams (“Capricorn One”) also have the term Capricorn in their name.

Capricorn

Meaning of Capioso

Meaning of Capioso

Capioso is an adjective that comes from a word that in Latin refers to the false or fallacious that is expressed in words or is part of a proposition or a doctrine.

On the other hand, the term also serves to refer to an argument or a question that serves to get an answer from the interlocutor; that is, as a form of provocation for the interlocutor to utter a response that may compromise him or her or that favors the purposes of the person making the expression.

Some sentences in which the term is found are: “The interviewer misled him with a leading question and the mayor confessed that he hired his son as an advisor”, “This is a tricky argument that seeks to confuse the population”, “It is of a captivating movement, which seduces young people with promises of freedom but ends up subjecting them to a leader ”.

A catch phrase usually implies a double meaning. One literal, which is presented as a single meaning, and another that must be discovered between the lines and that can lead a person to expose it or say something that, in reality, they were not willing to confess.

A leading question can also play directly with the literal. A man leaves his house and finds his neighbor changing a tire on his car. Then he asks him: “Do you want me to give you a hand?” Given the affirmative answer from his neighbor, he takes a plastic hand out of his pocket, hands it to him and leaves. This humorous situation presents a trick question because it has a double intention.

Another similar example occurs when someone asks for a “glass of water” and, instead of receiving a glass with water inside, receives a glass made with (ice) water.

The aim of the catch phrases is to surprise the intelligence of the listeners and to generate in them a particular answer. In order to formulate them, it is necessary to take a characteristic of reality and express it in a confusing way, which allows a double interpretation. The interlocutor’s options are two: take at face value what these words imply (getting to get the wrong message) or try to understand the true meaning of the sentence (having to grasp the irony hidden in the words).

Adjective forms similar to capioso

According to DigoPaul, the adjective capioso is usually used to refer to speeches and reasoning that include a certain falsehood. These types of speeches are characterized by the fact that through a subtle chaining and a certain manipulation of the language, they manage to lead the interlocutor to find himself in a situation that he could neither suspect nor foresee. They tend to be based on principles that are true at first glance but lead to false consequences.

There are several adjectives that could be considered similar to tricky, among them we can mention: malicious, devious, twisted or insidious. Although some differences can be established between one and the other, due to the nuance that each adjective contains, in general they could be used as synonyms.

However, it is interesting to establish the difference between an insidious speech and a captious one, by choosing two that are very similar. This difference lies in the fact that the first is presented in a seductive way, while the second dazzles the interlocutor and does not have time to realize the deception. In both cases, when the interlocutor wants to react, it is too late and is already part of a mess from which it will be very difficult to escape.

In any case, a chatty speech is used by someone who does not have clear intentions or who knows that the only way to obtain the result (the response of the interlocutor) that he wants is through deception and the pronunciation of a diffuse message.

Capioso

Meaning of Chaplain

Meaning of Chaplain

The first meaning that appears in the dictionary of the DigoPaul of the term chaplain refers to the religious who has a chaplaincy (an institution that grants certain goods with the obligation to fulfill Masses and other charges). Sometimes, by extension, an ecclesiastic is called a chaplain regardless of whether he has a chaplaincy or not.

It is common for a cleric who performs his functions in an institution that belongs to a certain group of the faithful to be called a chaplain. A chaplain, in this way, can be assigned to a college, a university, a hospital, a military unit or a prison, for example.

According to DigoPaul, chaplains give mass and give sermons in these kinds of places. According to the activity they carry out or the rank assigned to them, it is possible to recognize different classes of chaplains; Although most of the following names have fallen into disuse, it is necessary to know them to understand the historical documents in which they are mentioned:

* altar chaplain: he was the one who used to sing solemn masses in the royal chapel during feast days. The rest of the year, the office he celebrated was said. In certain churches, this name is also received by the priest who helps the celebrant;

* Choir chaplain: it could be any cathedral or church priest who attends canonical hours and the choir at services. Although they had less dignity than the rationary means, they helped through the formation of a community;

* honorary chaplain: he was the one who celebrated private masses for kings and other royals in their private oratories, in addition to attending canonical hours and offices, among other functions of the palace chapel, occupying the chaplain bench;

* Senior chaplain: one who in a community of chaplains or in a town hall occupies the highest position. In short, he is the one who has a group in charge;

* Military chaplain: this name is given to whoever performs his service in a battalion or a regiment, to name a case;

* chaplain of nuns is one who directs a community of religious and assists it spiritually;

* chaplain of His Holiness: he is a priest with the dignity of a monsignor who has this honorary title granted by the pope, who appoints him for having knowledge and powers that make him worthy of the position, in addition to having made invaluable contributions to the religious community . These men are generally elderly.

The concept of pastor is often confused with that of chaplain. While it is true that they share several of their characteristics, since the two roles are in charge of providing counseling and spiritual ministry to those in need, they have certain well-defined differences.

Typically, the pastor is associated with a specific parish or church, while the chaplain, with a particular agency or employer. Pastors focus on ministry to those who share their faith, or those who are thinking of converting to it, while chaplains often do not make their personal beliefs public.

Chaplain, finally, is the fish whose scientific name is Trisopterus minutus. Also known as mollera or minor pout, this animal belongs to the family group of the gádidos and usually lives in the Mediterranean Sea.

The chaplain has three dorsal fins that lack spines. With a small tail, it is a fish that is brown on the back and lighter on its belly, which is usually about eight inches long. The chaplain is part of the human diet and is also used to produce fish meal.

Chaplain

Meaning of Capicúa

Meaning of Capicúa

With etymological origin in the Catalan language, capicúa is a term that refers to that number that is identical when read from right to left and from left to right.

According to DigoPaul, 5775 is an example of a capicúa number. If we read it from left to right, we will find the following numerical series: 5-7-7-5. The same will happen if we read it backwards, from right to left: 5-7-7-5.

If we add 1 to 5775, we will obtain a new figure (5776) that will no longer be capicúa. As you can see, it is not the same to read 5776 from left to right (5-7-7-6) than from right to left (6-7-7-5).

Also called capicúa to the passage, ticket or ticket whose numbering is capicúa. Suppose a person purchases a bus ticket that presents the number 18381. Said ticket is capicúa.

The low probability of obtaining a capicúa ticket makes them collectibles or to which they are attributed good luck. In a series of 100,000 notes, there will only be 1,000 capicua notes. There is, in this way, one ticket or capicúa ticket for every hundred.

In Argentina, for many years the bus ticket was given by the driver to the passenger when he got into the vehicle and paid the money for the trip. These colored tickets had five figures: it was common for the passenger, upon receiving their ticket, to look at the numbering to see if it was a capicúa number. In case of being a capicúa ticket, in general the person kept it.

As in any similar case, there are those who would never get rid of a ticket with these characteristics, who would keep it with all possible precautions to prevent it from deteriorating, but there are also those for whom a capicúa number does not have any special meaning, so which they would throw away without thinking twice.

It is important to note that capicúa numbers are of great interest to people who are dedicated to numerology or who believe in its fundamentals. Numerology is the study of the meaning behind numbers. There are individuals who claim to see capicúa numbers at various times in their daily lives, on watches, on license plates, on television, and in many other places that seem to be sending them hidden messages.

For example, some people claim that they are “chased” by certain numbers or number combinations every time they spontaneously check the time, such as those who wake up at night always at the same time. Of course, the meanings of numbers can be positive or negative, so it is important to find them and do something about it if we really believe in these messages.

According to scholars of numerology, almost all numbers have a positive nature, except for the dreaded 6666, which announces the danger and which tells us about the devil himself, as well as the versions with the number 3; For example, in various works of fiction and stories of evil presences it is said that 3:33 is the time of the devil, so no one would want to wake up every night at that exact moment.

22 is one of the best numbers, since they indicate to those who see it that they are “on the right track “. Finding yourself spontaneously with a clock at 22:22, therefore, can be a source of joy and tranquility, especially if we are going through a difficult time, of doubts or of existential crisis.

The 11, for its part, can be associated with both the portals of light and those of darkness; Satanists are believed to use this number to “open negative portals” (the terrible events of 9/11 and 9/11 are used as the foundation for these ideas). All of its multiples have important meanings; 33, for example, indicates that “someone protects us”, while 77 assures us “happiness.”

Capicúa

Meaning of Hair

Meaning of Hair

The Latin word capillāris, derived from capillus, arrived in Castilian as capillary. The concept is used to refer to what is linked to hair (hair).

For example: “I am going to start a hair treatment to try to stop the progression of baldness”, “The stress caused me a hair problem”, ” Hair products are more expensive every day”.

While most of us are content to wash our hair every day, those who want to show it off in all its glory must spend much more effort on hair maintenance. According to DigoPaul, one of the essential tips is to brush your hair daily, as this action helps stimulate blood circulation to the scalp, which results in healthier and stronger hair.

Combing and brushing your hair is not a task that should be done in a hurry, with the sole objective of detangling it; on the contrary, there are those who do it two or three times a day for several minutes, seeking to massage the scalp gently but constantly.

Another point to which we should pay attention to be successful in hair care is the temperature of the water with which we wash our heads: it is known that hot water weakens the scalp, and negatively affects properties such as shine and the moisture of the hair. Precisely, it is important to wash your hair with natural water to seal the cuticles and achieve more shine and softness. In times of low temperatures, warm water is enough.

Similar to what happens with water, prolonged exposure of hair to high temperatures can dry out the scalp, something that causes progressive deterioration that results in a loss of shine. This also applies to excessive use of blow dryers and flat irons, which also negatively affect the ends and strength of the hair. There are moisturizing products that are usually indicated as a complement to these treatments, although the ideal is to avoid them completely.

People with unruly hair are often reluctant to comb their hair, although this could not be more counterproductive when it comes to hair care. Removing dead hair from our head is necessary for a hygiene issue; The knots must also be treated very delicately, to allow the hair to move freely and take advantage of the beneficial properties of the products we apply to it. Never pull hard, but try to loosen tangled areas with coconut oil or jojoba oil, for example, and practice patience.

The notion is also used to name tubes or ducts that are narrow. Within this framework, the thin blood vessel is called capillary that allows the circulation of the veins and arteries to be linked, establishing a network.

Blood capillaries, having a single layer of tissue, allow an exchange between the blood and those substances that are around it to take place.

One can differentiate between arterial capillaries and venous capillaries. Arterial capillaries carry oxygenated blood, while venous capillaries carry deoxygenated blood.

It should be noted that capillarity is the property of a fluid that is related to its surface tension, in turn linked to the cohesion of the fluid itself. Capillarity implies the ability of the liquid to descend or ascend through a capillary tube (a narrow tube through which a fluid circulates). This movement is due to the relationship between the intermolecular force of the liquid and its adhesion to the duct material.

Capillary tubes can be made of metal, glass, or another material. They are usually used in refrigerant circuits to allow the passage of the refrigerant liquid, which gains or loses pressure according to the moment.

Hair 2