Blog Posts

What Is Window Dressing? Window dressing is a practice used by corporations and businesses in their financial reports to make the company appear more profitable than it actually is. It involves manipulating accounting numbers or hiding certain information, such as debt or expenses, so that the overall financial picture looks better. Window dressing can be […]

What Is a Deferred Tax Asset? A deferred tax asset is an accounting term that refers to a situation when a taxpayer has overpaid taxes, or paid taxes in advance, and is entitled to receive a refund of the amount paid. It is created when taxable income is reported on an income statement but the […]

What Is a Reverse Stock Split? A reverse stock split is a corporate action in which a company reduces the total number of its outstanding shares and increases the share price proportionally. It is usually done to boost investor confidence or comply with exchange listing requirements. For example, if a company performs a 1-for-10 reverse […]

Social Impact Bonds Meaning Social impact bonds are a type of public-private partnership that enables private investors to fund social projects, and be repaid if the project meets certain predetermined outcomes. They are designed to bring together government, philanthropy, and private capital to address key social challenges. Social impact bonds typically involve a contract between […]

What Is Adverse Selection? Adverse selection refers to a type of outcome in a market where buyers or sellers have more information than the other. This can create an asymmetry in the market, which favors one party over another. In insurance markets, for instance, adverse selection may occur when people with a higher risk of […]

What Is Austerity? Austerity is the act of a government cutting spending in order to reduce its deficit. It is usually done in response to a financial crisis. Austerity measures are typically unpopular with the public, as they involve cuts to government services and benefits. However, supporters of austerity argue that it is necessary in […]

What is the Fisher Effect in Economics? The Fisher Effect states that the interest rate is equal to the real return on investment plus the inflation rate. In other words, the nominal interest rate is equal to the real interest rate plus inflation. The Fisher Effect is named after economist Irving Fisher, who first proposed […]

What Are Structured Notes? Structured Notes Explained Structured notes are a type of investment that may combine features of various asset classes, (e.g., bonds and stocks), single assets or asset classes, and contains a derivative component that alters the risk-return profile of the investment. They are debt securities issued by banks, insurance companies, and other […]

What Are Liquidity Ratios? Liquidity ratios measure a company’s ability to pay off its short-term debts. Liquidity ratios are an indication of a company’s financial health and its ability to meet its short-term obligations. There are several liquidity ratios, but the two most common are the current ratio and the quick ratio. The cash ratio […]

What Is Receivables Turnover Ratio? The receivables turnover ratio is a financial ratio that measures the speed at which a company collects its receivables. This ratio is also known as the receivables turnover rate or the receivables turnover. The receivables turnover ratio is calculated by dividing a company’s sales that were made on credit by […]