finance
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Understanding Market Value of Debt: Beyond Book Value
The Market Value of Debt refers to the market price investors would be willing to buy a company’s debt for, which differs from the book value on the balance sheet. A company’s debt doesn&r
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Market Risk Premium: Definition & Calculation | Investopedia
The market risk premium is the additional return an investor will receive (or expects to receive) from holding a risky market portfolio instead of risk-free assets.The market risk premium is part of t
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Understanding Market Capitalization: A Comprehensive Guide
Market Capitalization (Market Cap) is the most recent market value of a company’s outstanding sharesWeighted Average Shares OutstandingWeighted average shares outstanding refers to the numb
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Understanding Markets: Definition, Types & Examples
A market refers to a space that facilitates an economic transaction between parties: the buyers and the sellers. An economic transaction may involve an exchange of goods, information, services, curren
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Marginal Propensity to Save (MPS): Definition & Economic Significance
The marginal propensity to save (MPS) refers to the portion of additional disposable income that is saved by a consumer. The MPS for any individual reflects how much one is willing to save, usually a
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Margin of Safety: Definition, Calculation & Importance
The margin of safety is the difference between the amount of expected profitability and the break-even point. The margin of safety formula is equal to current sales minus the breakeven point, divided
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Managerial Finance: Techniques for Business Decision-Making
Managerial finance is concerned more with the assessment of financial techniques versus the financial techniques themselves. It differs from the technical approach, which essentially only concerns its
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Understanding Management Expense Ratio (MER): A Comprehensive Guide
The management expense ratio (MER) – also referred to simply as the expense ratio – is the fee that must be paid by shareholders of a mutual fund or exchange-traded fund (ETF)Exchange Trad
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Understanding Management Discussion & Analysis (MD&A): A Comprehensive Guide
Management discussion and analysis, or MD&A, is a section that can be found in the annual report of a company. The MD&A section provides key information regarding how a company is performing f
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Management Buyout (MBO): Definition, Process & Benefits
A management buyout (MBO) is a corporate finance transaction where the management team of an operating company acquires the business by borrowing money to buy out the current owner(s). An MBO transact
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Majority Shareholder: Definition, Rights & Implications
A majority shareholder is any individual or company (or sometimes a government) that owns more than 50% of a company’s shares. Because such individuals or entities make a substantial financial i
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Understanding Key Risks Facing Banks: A Comprehensive Overview
Major risks for banks include credit, operational, market, and liquidity risk. Since banksFinancial IntermediaryA financial intermediary refers to an institution that acts as a middleman between two p
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Understanding the MICR Line on Checks: What You Need to Know
The term Magnetic Ink Character Recognition (MICR) refers to the small digital characters at the bottom of a check or a financial document. The MICR line is a set of digital numbers that represent the
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Macrofinance Explained: Understanding Economic Policy & Market Trends
Macrofinance targets widespread benefits to a section of the economyMarket EconomyMarket economy is defined as a system where the production of goods and services are set according to the changing des
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Modigliani-Miller Theorem: Understanding Capital Structure & Firm Value
The M&M Theorem, or the Modigliani-Miller Theorem, is one of the most important theorems in corporate finance. The theorem was developed by economists Franco Modigliani and Merton Miller in
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LTM Revenue: Definition & Importance in Financial Analysis
LTM stands for “Last Twelve Months” and is similar in meaning to TTM, or “Trailing Twelve Months.” LTM Revenue is a popular term used in the world of finance as a measurement o
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Understanding LTM: Last Twelve Months Explained
LTM (Last Twelve Months), also sometimes known as the trailing or rolling twelve months, is a time frame frequently used in connection with financial ratios, such as revenuesSales RevenueSales revenue
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Understanding Look-Ahead Bias: Causes, Effects & Examples
Look-ahead bias is a type of bias that occurs when a study or simulation relies on data or information that was not yet available or known during the time period being studied. It generally leads to i
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Understanding the Long-Term Capital Investment Cycle
The long-term capital investment cycle occurs when the large capital assets of a company go through the entire duration of their lifespan. Capital investments are usually a sizable investment in dolla
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Understanding Long-Run Supply: Definition & Market Dynamics
The long-run supply is the supply of goods available when all inputs are variable. It means that in the long run, all property, plant, and equipment expenditure is variable. Furthermore, in the long r
finance
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Free Ways to Cash In Your Loose Change: Gift Cards & MoreTwo sisters counting putting change into a piggy bank. You can gather up the change you have hiding in your couch and cash it in without fees. There are several options available for getting ...
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Proof of Income Letter: Guide & Template for Self-Employed & EmployeesA self-written proof of income letter typically requires supporting documentation. Banks, mortgage lenders, potential landlords and government agencies routinely verify income before making f...
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Understanding Bank Business Segments: Retail, Wholesale & Wealth ManagementA bank’s major business segments are retail banking, wholesale banking, and wealth managementPrivate Wealth ManagementPrivate wealth management is an investment practice that involves financial ...
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Disability Earnings: Understanding Income Limits & Trial Work PeriodsIf you have filed and won a Social Security disability claim, you are receiving monthly benefits from the Social Security Administration. The agency has approved your claim and adjudged that your disa...