The difference between cash flow and profit, explained

A company is ‘in the black’ if it is profitable

If a company is “in the red,” however, it is unprofitable. The expressions stem from the days before computers were widely used in accounting, when accountants updated financial data in their books by hand, using different colored ink (black and red) to signal a company's profitability.

Credit card companies make money through interest, annual fees, and more

They also profit from interchange fees, the fee the retailer has to pay the credit card network in order to facilitate a transaction. The fee is typically between 1% and 3% of the transaction amount.

A cost basis is an asset's purchase price after accounting for certain other factors

If you bought a share for $5 and sold it for $140, your capital gain would be $135...on paper, at least. In reality, the math is fuzzier. Capital gains are actually the difference between the sale price of the asset and your cost basis.

Nearly 3 million people fly in and out of US airports every day

However, not all of those passengers generate revenue for the airlines they purchase their tickets from. One business class traveler typically pays for five to six economy travelers. That's partly because airlines measure profit by the square foot, and although a business class seat is usually roughly 30% roomier than economy seats, the business class traveler usually pays about three times as much as someone sitting in economy.

Credit unions, explained

Proponents of credit unions often point to the fact they’re not-for-profit cooperatives instead of for-profit businesses as a key selling point. This explainer dives into what this looks like in action—instead of pocketing the profits from interest rates, credit unions reinvest that money into the products and services they offer. For customers, this tends to create a more personal and community-oriented experience.

What's the difference between a stock and a share?

While the words "stock" and "share" are often used interchangeably in casual conversation, they have different meanings. For instance, "stock" is more general, whereas "share" is more precise.

While the Fed is involved in issuing new generations of cash, the way it adds to the money supply does not involve printers

The majority of money in circulation is credit, not cash. This credit, which acts similarly to direct deposit from employers, is added to bank accounts by the Federal Reserve. The Fed also employs tools like the federal funds rate and open market operations to expand or contract credit.

Amazon's largest profit engine is the cloud-computing platform Amazon Web Services

Also known as AWS, Amazon Web Services is a suite of IT resources such as storage, databases, and more. While Amazon owns AWS, lots of other tech companies—including Slack and Pinterest—use it to help run their IT operations. In 2023, AWS brought in $25B in profit—outpacing Amazon's entire North American retail division.

Proof-of-work versus proof-of-stake: what's the difference?

The two main consensus mechanisms—the way blockchains confirm and enshrine information—are proof-of-stake and proof-of-work. An overview compares the differences between the two and the latter's ability to reduce the energy intensity of the computation process, which has emerged as one of the biggest criticisms of the crypto boom.

Reinvested dividends are not a way to dodge paying capital gains taxes

When an investor holds stock in a company that pays a dividend—a portion of its profits directly returned to shareholders as monthly or quarterly payments—they can choose to hold that dividend in cash, spend it, or reinvest it into more shares of that company’s stock.

Use a prediction market profit or loss calculator

In order to calculate how much someone would make from a specific trade on a prediction market, this calculator asks for the purchase price of a given "yes" or "no" prediction, the number of contracts the trader plans to purchase, and more.

Learn how tax credits are applied to income taxes

Tax credits are directly subtracted from the amount of money taxpayers owe on their annual income. Unlike tax deductions, credits reduce the owed amount while deductions reduce how much income is taxable. There are different types of tax credits that are either fully or partially paid out.

How life looks different with a $75K household income versus $150K

"The cleanest way to describe the gap is that $75K is often about stability, while $150K can be about optionality, but only if fixed expenses do not expand to consume the raise," said one finance professor.

Escrow is when a third party holds on to the money during a financial negotiation between two other parties

In the homebuying process, escrow typically happens while the buyer and the seller negotiate the terms of the sale. Escrow accounts can also be used to hold a buyer’s money when making payments on their loan.

Friction is the force that resists the sliding of surfaces along one another

Friction always acts to resist movement and is determined by how rough the surfaces are and how hard they are pressed together. In the case of fluids, friction arises from the relative motion between adjacent fluid layers, which act like sliding surfaces.

COBOL was partly derived from Grace Hopper's FLOW-MATIC programming language

The Common Business-Oriented Language was developed for business data processing, supporting precise decimal calculations and an English-like syntax. Able to work across operating systems and hardware environments, COBOL and its newer versions support 80% of in-person credit card transactions and 95% of all ATM transactions.

Location is the most important factor for profitability in real estate investing

“Location, location, location” is a saying for a reason. From the neighborhood’s status to its proximity to its tax implications, location is among the most important factors for real estate investors to consider in transactions.

A taxonomy of restaurant types

What's the difference between "fast food" and "fast casual"? Is there any real difference between a "diner" and a "family style restaurant"? This guide from DoorDash explores the industry's fine distinctions, along with some deeper dives into specific enterprises that found success.

The total cost of owning an ETF is the sum of the holding costs and the transaction costs

Holding costs include things like the expense ratio, or the annual fee that a fund issuer charges. Transaction costs include things like brokerage commissions, or the fee that a broker charges to enact a trade. However, in recent years, most brokers have essentially eliminated commissions on ETF trading.

What's the difference between weather and climate?

A five-minute TedEd video exploring the differences between weather and climate – what they are, how we predict them, and what those predictions can tell us.

Payday loans typically have higher interest rates than cash advances

Cash advances and payday loans are both short-term loans that allow borrowers to access cash quickly. Payday loans are much shorter-term, often due in two weeks or by the borrower's next paycheck, and have much higher interest rates.

Private equity IRR is the internal rate of return on a PE investment or fund

It's typically expressed as an annualized percentage that incorporates both the size and timing of cash flows between investors and the fund. It's the discount rate that makes the net present value of all cash flows equal zero. Many private equity funds target a net IRR in the mid‑teens to low‑20s percent range, with an 8% "hurdle" or preferred return as a minimum before carried interest or "carry" is paid.

The economics of Chick-fil-A

Chick-fil-A has dominated national customer satisfaction surveys while growing conservatively for decades. This video goes into the economics the company deploys to be successful.

Contrary to popular belief, Netflix didn't kill Blockbuster

Blockbuster was definitely the loser in its years-long battle with Netflix, but the conventional wisdom that the streaming giant killed the established video store chain is incorrect. Blockbuster’s large debt load—and an activist shareholder who didn’t fully appreciate the threat Netflix posed—led the chain to squander its advantages.

A 'death benefit' can replace lost income, pay for a funeral, or leave a legacy

Those beneficiaries are usually family members. In exchange, the policyholder pays a monthly fee for coverage. It’s normally used to cover the life of a financial provider.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

SpaceX's S-1 or 'prospectus' revealed many previously unknown details about the company, including its unprofitability despite doing $18.7B in revenue in 2025, exactly how many voting shares Elon Musk will have in the company (roughly 85%), and more.

Chaos theory—informally known as the butterfly effect—is the reason why weather forecasts are presented with probabilities rather than certainties.

Use this tool to calculate the dollar value of your parental mental load, from meal planning to coordinating after-school care, then see resources that help generate solutions.

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

Studies suggest when you sleep is as important as how much you get, and syncing with your circadian rhythms may lead to less fatigue and improved long-term health outcomes

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

The deadliest aspect of volcanic eruptions is often not lava, but pyroclastic flows—avalanches of ash, gas, and rock that can move more than half the speed of sound.

The syncytiotrophoblast is the outer layer of the placenta and the largest human cell, spanning an area about twice that of a king-sized bedsheet.

While the sun's gravity keeps the planets in orbit, their gravity also pulls on the sun, causing it and everything else in the solar system to orbit around a mutual balance point called the barycenter—the true center of the solar system.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

SpongeBob exemplifies Aristotle's philosophy for living well because he understands that happiness doesn't come from external factors like money, recognition, or power.

The word 'jazz' evolved from 'jasm,' 19th-century American slang for 'energy'

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Visualize how CRISPR-Cas9—a type of immune system used by single-celled organisms to attack invasive viruses—targets and makes precise changes to a gene's DNA.

Poison ivy is in the same family as mangoes, cashews, and pistachios—and they all produce oily urushiol in their raw, unprocessed state—but they are typically prepared in ways to avoid causing human discomfort.

Comedy legend Catherine O'Hara, star of 'Schitt's Creek' and 'Home Alone,' quit 'Saturday Night Live' after just one week to return to her old job.

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.