What is Labor Productivity? Labor productivity is a measure of a country's economic output (real Gross Domestic Product) that is the result of a single hour of labor. Labor productivity is heavily affected by expenditure on physical capital, technology, and human capital. How is Labor Productivity Used? Labor productivity has a direct link with impr...

What are the Tax Considerations in Choosing an Inventory Accounting Method?  Because inventory costs affect net income, we just talked about that they inherently have potential tax effects. Assuming that we're in an inflationary period, FIFO yields the highest net income. It's going to result in the company paying the highest amount of taxes. But, o...

What is an Uptick? When trading of a financial instrument occurs at a higher price than the preceding round, it is known as uptick or plus tick. It is an increase in the market price of a financial instrument over the previous transaction. Even if the market price increases only one cent then also it is considered to be on an uptick. The concept of ...

What is an Operating Lease?   What is a Capital Lease?...

What is Vertical Integration? Vertical integration is basically when a company is able to control several vertical levels of the supply chain. In the supply chain, we have a number of stages such as; raw material, manufacturing, distribution, and retail. A company may play a role of manufacturing, distributing and retailing. When a firm is able to i...

When Should Startups Consider Doing an Initial Coin Offering rather than a VC Round of Funding? Initial coin offerings (ICOs) are a relatively recent phenomenon. Technology companies, unsatisfied by the traditional routes of securing operational funding, created a method of raising funds without the use of debt funding or venture capital. In summary...

What is Insufficient Funds?  Insufficient funds, as the name implies, is a situation where a particular account does not have enough funds, capital or resources in it to offset a particular payment request. Besides being called "bouncing a check", it is also known by the acronym NSF which stands for non-sufficient funds". Back to:BANKING, LENDING, &...

What is Multiple Discriminant Analysis? Multiple discriminant analysis (MDA) is a statistical measure that financial planners use to ascertain the prospective investments when a lot of variables need to be considered. It minimizes the dissimilarity between many variables, and organize them into large groups, where they can be compared with some othe...

What is a Type I Error? A type I error is a type of error that occurs in statistical hypothesis testing in which a true null hypothesis is rejected. When a null hypothesis which is actually true is rejected when it should not be, a type I error has occurred. In statistical hypothesis testing, a null hypothesis is often established before the test. A...

What are Risk Groups? Not all of those who purchase insurance face the same risks. Some people may be more likely, because of genetics or personal habits, to fall sick with certain diseases. Some people may live in an area where car theft or home robbery is more likely than in other areas. Some drivers are safer than others. We can define a risk gro...