Treasury Bill (T-Bill) – Explained

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

What is a Treasury Bill?The United States Treasury Bill is a debt instrument issued by the federal government to collect funds for various public projects. These are short-term debt obligations backed by full faith and credit of the United States Government. US...

Pareto Rule (80/20 Rule) – Explained

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

What is the Pareto or 80-20 Rule?The 80-20 rule, also known as Pareto Analysis, is the principle of factor sparsity. It is a business rule which states that 80 percent of many events come from 20 percent of the causes. The business personnel uses this 80-20 rule to...

International Financial Reporting Standards (IFRS) – Explained

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

Update Table of Contents What is the International Financial Reporting Standards?What Does the International Financial Reporting Standards Do?Standard IFRS RequirementsIFRS vs. American StandardsIFRS HistoryAcademic Research on International Financial Reporting...

Internal Rate of Return – Explained

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

What is an Internal Rate of Return?Internal rate of return (IRR) refers to a metric utilized in capital budgeting to estimate how profitable potential investments are. Internal rate of return refers to a discount rate which makes all cash flow’s net present...

Penny Stock – Explained

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

What is a Penny Stock?A penny stock is usually traded outside of the principal market exchanges at a comparatively low price and bears a small market capitalization. These stocks are usually highly speculative and have high risk due to less liquidity, big bid-ask...

Price Earnings Ratio (PE Ratio) – Explained

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

What is the Price-Earnings Ratio?The price-earnings ratio (P/E ratio) determines the value of the company by calculating the its current share price comparative to its per-share earnings. The price-earnings ratio is also often known as the price multiple or the...

Opportunity Cost – Explained

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

What is Opportunity Cost?Opportunity costs show the advantages an individual, business or investor misses out on when selecting one option over another. While the financial reports don’t reveal the opportunity cost, business owners use it to make informed...

Net Asset Value (Investments) – Explained

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

What is Net Asset Value?The net asset value (NAV) is defined as the net value (net worth or total value) of an entity. When the total value of a fund assets liabilities is subtracted from the total value of the funds assets, the Net asset value is realized. NAV also...

North American Free Trade Agreement (NAFTA) – Explained

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

What is the North American Free Trade Agreement (NAFTA)?The North American Free Trade Agreement (NAFTA) was signed by Mexico, Canada and the United States to eliminate trade barriers on products (textiles, automobiles, agriculture and many others) traded between these...

Mortgage-Backed Securities Clearing Corporation – Explained

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

What is a Mortgage-backed Securities Clearing Corporation?Mortgage-Backed Securities Clearing Corporation is an organization that has the responsibility of overseeing transactions relating to mortgage-backed securities. MBSCC is an organization certified and...