Commerce Questions and Answers

The reserve ratio is a compulsory portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest. Simply put, it is the minimum amount of money that banks are expected to keep in their accounts, with no option of lending it or investing it.

This is done to cater to unforeseen circumstances and to ensure that banks can always meet up with their daily monetary obligations to customers without running out of money.

Capital employed is derived by subtracting current liabilities from total assets

Retained earnings are a portion of a company's profit that is held or retained from being distributed or paid out to investors, but rather re-invested into the business. This is one of the cheapest sources of funds for a business because it doesn't come at an extra cost. That is, the business will not be required to pay interest on the funds.

A cartel is where two or more businesses agree not to compete with each other. The businesses agree not to compete with each other. Example the OPEC

One of the criteria for getting your business name registered by the corporate affairs commission is that it must be a unique and distinct name, different from an already existing business name. This means that whatever name you choose, must not conflict with that of another.