Acquisition Cost

Filed Under » ,
Dictionary Says

Definition of 'Acquisition Cost'

1. The cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs and other necessary expenditures, but before sales taxes.  

2. The cost of a business to acquire a new customer. The company recognizes costs, including marketing and incentives, to introduce new customers to the company's products and services. The customer acquisition cost is calculated by dividing total acquisition costs by total new customers over a set period of time.

Also known as "cost of acquisition."

Investopedia Says

Investopedia explains 'Acquisition Cost'

1. Acquisition costs recognize more realistic costs on a company’s financial statements. The acquisition cost of property and equipment recognizes any discounts or additional costs that the company will experience.

2. Customer acquisition costs are also important for companies to measure, as it aids in planning future capital allocations to things like marketing budgets and sales discounts. The company should also look at customer loyalty and whether the company will be able to retain customers easily.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Property, Plant And Equipment - PP&E

    A company asset ...
  2. Cost Of Acquisition

    A business sales ...
  3. Marketing

    The activities ...
  4. Capital Allocation

    A process of how ...
  5. Loss Leader Strategy

    A business ...
  6. Share Of Wallet - SOW

    A marketing term ...
  7. Acquisition Financing

    The capital that ...
  8. Repurposing

    The use of ...
  9. Amalgamation

    The combination ...
  10. Boom

    A period of time ...

Articles Of Interest

  1. Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  3. Tips For Boosting Your Business

    Find out how butter up new clients, build up old files and better your bottom line.
  4. How rapidly can expanding sales reduce a firm's earnings?

  5. What is property, plant and equipment, and what does it mean?

  6. Should You Invest Your Entire Portfolio In Stocks?

    It is true that stocks outperform bonds and cash in the long run, but that statistic doesn't tell the whole story.
  7. The Uses And Limits Of Volatility

    Check out how the assumptions of theoretical risk models compare to actual market performance.
  8. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  9. 5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  10. Invest Like A Pro

    By following the strategies of the pros, even a beginner can learn to invest like an expert.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center