Fixed Charge

AAA

DEFINITION of 'Fixed Charge'

Any type of fixed expense that recurs on a regular basis. Fixed charges can include insurance, salaries, utilities, vehicle payments, loan payments and mortgage payments. These charges allow both individuals and businesses to create more predictable budgets and estimate their cash flows more accurately.

INVESTOPEDIA EXPLAINS 'Fixed Charge'

Both businesses and individuals can have fixed charges. Businesses may have liability or malpractice insurance, while individuals pay car and home insurance. Businesses can often deduct many or all of their fixed charges as business expenses.

RELATED TERMS
  1. Financial Statements

    Records that outline the financial activities of a business, ...
  2. Account Statement

    A periodic summary of account activity with a beginning date ...
  3. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  4. Cash Flow Statement

    One of the quarterly financial reports any publicly traded company ...
  5. Full Charge

    The event in which the price of a futures contract covers all ...
  6. Equivalent Flat Rate

    The rate at which a flat rate insurance guarantee scheme and ...
RELATED FAQS
  1. Is the banking sector subject to any seasonal trends?

    The banking industry, including retail and investment banks, is subject to seasonal trends. Seasonality is most commonly ... Read Full Answer >>
  2. How are contingent beneficiaries informed of a payout?

    One of the greatest tools in estate planning is beneficiary designation. Listing primary and contingent beneficiaries is ... Read Full Answer >>
  3. What are some examples of a deferred tax liability?

    In the United States, laws allow companies to maintain two separate sets of books for financial and tax purposes. Because ... Read Full Answer >>
  4. Why is the use of contra accounts so important for maintaining ledgers?

    Contra accounts have been used in financial accounting to verify the balance of another corresponding account since Renaissance ... Read Full Answer >>
  5. What is the difference between an Equity REIT and a Mortgage REIT?

    There are several types of real estate investments trusts (REITS) that investors can purchase, including equity REITS and ... Read Full Answer >>
  6. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
Related Articles
  1. Brokers

    Top Tax Deductions For Brokers

    If you are paying out of pocket, you can make your business expenses work for you at tax time.
  2. Budgeting

    Say "I Do" To Financial Compatibility

    Make a commitment to prevent finances from souring your relationship.
  3. Insurance

    Understanding Cash Surrender Value

    The amount of money an insurance company pays the owner of an insurance policy if the policy is voluntarily surrendered prior to the event that is insured
  4. Investing

    What is Comprehensive Income?

    Comprehensive income is a part of the owners’ equity section of the balance sheet.
  5. Economics

    Explaining Financial Analysis

    Financial analysis is a general term that refers to using financial data to make business and investment decisions.
  6. Economics

    What Does Debit Mean?

    Debit is an accounting term used to refer to the left side of an accounting journal entry. Each debit must be offset by an equal credit entry.
  7. Taxes

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  8. Economics

    What are Accounting Principles?

    The term accounting principles refers to rules and guidelines companies use to help them record their business and financial transactions.
  9. Economics

    Understanding the Accounting Cycle

    An accounting cycle consists of the traditional procedures performed to record business events and transactions in a company’s accounting records.
  10. Fundamental Analysis

    When & Why Should a Company Use LIFO

    By using LIFO (last in, first out) when prices are rising, companies reduce their taxes and also better match revenues to their latest costs.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center