Carrying costs


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Carrying costs

Costs that increase with increases in the level of investment in current assets.

Carrying Charge

1. The cost of storing a commodity over a period of time. It includes incidental costs, insurance coverage, and the physical cost of storage. It does not include depreciation, if any. The carrying charge is incorporated to the price of a commodity on the futures market.

2. In interest rate futures, the difference between the cost of purchasing an instrument and its yield. See also: Profit, Loss.

3. Fees a firm charges for making a loan. The largest single carrying charge is the interest, but it also includes charges such as an origination fee or an application fee. See also: All-in cost.
References in periodicals archive ?
business inventory carrying costs ($ billions) 2005 2006 % change Interest 58 93 60.
Delaney of Cass Information Systems estimates that at a macrolevel, noncapital carrying costs are approximately 19 percent of inventory.
However, at some point, the costs of additional credit investigation will outweigh its benefits in terms of reduced bad debt and carrying costs.
The UNICAP extra tax cost as a percentage of the other carrying costs.
For asset-intensive industries that operate around the clock in remote sites, maintaining stocking levels of critical spares while reducing overall carrying costs not only leads to more efficiency, but also to millions of dollars in cost savings.
With the release of these products, companies can experience greater return on assets, improvements in transportation operations, lower inventory carrying costs and shorter order to cash cycle times.
The reduced carrying costs ensure a strong financial outlook for the community over the next ten years and should greatly enhance the financial stability of this community and the value of individual cooperative apartments.
Based on pilot results, Timken's Kunsebeck plant is targeting a 20 percent reduction in inventory and inventory carrying costs in 2006.
By choosing the accelerated auction method of sales, the seller can avoid the carrying costs associated with long-term asset management and maintenance, including taxes and marketing expenses.
Rock-Tenn Company expects to incur cash operating and restructuring costs of approximately $3 million, which will include severance, facility lease and carrying costs net of sublease rentals and equipment relocation costs, and to incur asset impairment costs of approximately $2 million.
This action saved the seller approximately $1 million in carrying costs that would have accrued during a workout period.
Sophisticated service parts forecasting and planning is mission critical for companies looking to meet or exceed service commitments while minimizing inventory carrying costs.