Installment Sale Method (Accounting) – Explained

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

What is an Installment Sale?An installment sale approach is one of the many ways revenue is recognized according to the Generally Accepted Accounting Principles (GAAP). In this method, revenue is only recognized when cash is collected by a business and not when sales...

Boom and Bust Cycle – Explained

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

What is the Boom And Bust Cycle?A boom and bust cycle refers to a series of fluctuations in an economy in which there are persistent expansion and contraction of the economy. Boom and bust cycles affect different sectors and industries in an economy, for instance,...

Book to Market Ratio – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is the Book-to-Market Ratio?The book-to-market ratio is a ratio used to determine the value of a company by comparing its book value to its market value. The market value of a company is derived from the value (price) of its stock in the market while the book...

Type II Error – Explained

by TheBusinessProfessor | Feb 23, 2025 | Research, Quantitative Analysis, & Decision Science

What is a Type II Error?A type II error occurs when there is a non-rejection of a false null hypothesis, this type of error is also called a false negative finding or conclusion. In statistical hypothesis testing, if a false null hypothesis is not rejected when it...

Type I Error – Explained

by TheBusinessProfessor | Feb 23, 2025 | Research, Quantitative Analysis, & Decision Science

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...

Total Expense Ratio – Explained

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

What is a Total Expense Ratio?The total expense ratio (TER) measures the total costs associated with managing or running an investment fund, it is also the cost of a fund incurred by an investor. Investment funds such as mutual funds are managed by fund managers or...

Traditional Theory of Capital Structure – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is the Traditional Theory Of Capital Structure?The Traditional Theory of Capital Structure is a theory that posits that for an optimal capital structure to exist, the weighted average cost of capital (WACC) must be at a minimum level while the market value of the...

Specific-Shares Method (Investements) – Explained

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

What is the Specific-Shares Method?The specific-shares method is a trading method used by investors for tax purposes and to reduce tax liability for a particular year to the barest minimum. Through this method, investors maximize their capital gains or capital losses...

Agreement Corporation – Explained

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

Update Table of Contents What is an Agreement Corporation?How Does an Agreement Corporation Work?The Edge Act What is an Agreement Corporation?An agreement corporation can be defined as a corporation that has been chartered by a state to take part in international...

Stepwise Regression – Explained

by TheBusinessProfessor | Feb 23, 2025 | Research, Quantitative Analysis, & Decision Science

What is a Stepwise Regression?Stepwise regression is a statistical method of building a model in which an automatic selection of independent variables occur. This form of regression uses repetitive steps, in each step, there is a forward or backward selection of...