Capitalization Ratios – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What are Capitalization Ratios?What are the common Capitalization Ratios? What are Capitalization Ratios?Capitalization ratio is a financial metric that measures the solvency of a firm by examining its capital structure which is the...

Organization of the Petroleum Exporting Countries (OPEC) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Global Business, International Law & Relations

What is OPEC?The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization established to coordinate, unify, and solidify petroleum policies among member countries. OPEC was established in September 1960 between 5 oil-producing...

Annualize – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is Annualize?How Does Annualization Work?Company PerformanceLoansTax PurposesInvestmentsKey TakeawaysSpecial Considerations and Limitations of Annualizing What is Annualize?The term ‘to annualize’ means to express a short-term...

Diner’s Dilemma – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Diner’s Dilemma?Diner’s dilemma refers to a situation where several participants in a game strive to get the highest reward but end up destroying themselves. In a bid to come out with the best result, players in a game put one another in an...

Positive Economics – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Positive Economics?Positive economics is a branch of economics that describes and explains economic happenings just the way they are and not the way they ought to be. Positive economics is otherwise called “what is” economics, while the normative...

Percentage of Completion Method – Explained

by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting

What is the Percentage of Completion Method?The percentage of completion method is used in accounting to demonstrate how the revenue and expenses of a long-term project are realized based on the percentage of work that has been completed during the period. The...

Relevant and Irrelevant Cost (Accounting) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting

What is a Relevant Cost?A relevant cost is a cost affected by a manager’s decision or managerial decision making. What is an Irrelevant Cost?An irrelevant cost is a category of cost that is not affected by managerial decisions. This means this cost does not...

Crowding Out Effect – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Crowding Out Effect?The crowding-out effect is an economic theory that states that increased government spending effectively reduces total private spending. What Causes the Crowding Out Effect?Increase government spending causes higher demand for capital...

Credit Card Accountability, Responsibility, and Disclosure Act – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is the Credit Card Accountability, Responsibility, and Disclosure Act of 2009?How Does the Credit Card Accountability, Responsibility, and Disclosure Act Of 2009 Work?Credit CARD Act 2009 ProvisionsWhy is the Credit CARD Act of 2009...

Cox, Ross, & Rubinstein Option-Pricing Model – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is the Cox, Ross, & Rubinstein Option-Pricing Model?The two-item option-pricing model, also known as CRR, is a mathematical formula used to estimate the value of an American options value. It is exercisable at any given time up to the expiration date. CRR...