The cost of carry is the cost of holding an asset over a period of time. This cost can be in the form of interest, storage, insurance, or other expenses. The cost of carry is important to investors because it can impact the return on their investment. For example, if an investor buys a stock and holds it for one year, the cost of carry would be the interest expense incurred on the loan used to purchase the stock. If the stock goes up in value, the investor would need to make up for the cost of carry in order to realize a profit.
investors use the cost of carry to decide whether to buy or sell an asset. If the cost of carry is high, it may be more advantageous to sell the asset and invest the proceeds in a different asset with a lower cost of carry. What is carry over cost? The term "carryover costs" refers to the costs incurred by a company in one accounting period that are carried over into the next period. These costs can include inventory, accounts receivable, accounts payable, and other expenses. What is the difference between carrying cost and holding cost? The main difference between carrying cost and holding cost is that carrying cost includes all of the costs associated with keeping an inventory item on hand, while holding cost only includes the costs associated with storing the inventory item. Carrying costs can include things like the cost of the inventory item itself, insurance, storage, and any interest charges associated with financing the inventory. Holding costs, on the other hand, are typically just the costs of storing the inventory item.
What is carry in P&L?
P&L is an acronym for "Profit and Loss." The term "carry" refers to the idea of capturing profit (or loss) in an accounting period and "carrying" it over to the next period. In other words, if a company has a profit in one accounting period, it will carry that profit over to the next period. If it has a loss, it will carry that loss over. The purpose of this is to smooth out profits and losses so that they are more consistent over time.