Debt to Income Ratio – Explained

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

What is the Debt-to-Income Ratio (DTI)?Debt-to-Income Ratio (DTI) is calculated by dividing one individuals or company’s debt payments by his or her or its total income over a specified period, expressed as a percentage.How is Debt-to-Income Ratio Used?The DTI...

Diversification Strategy (Investments) – Explained

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

What is Diversification in Finance?Diversification is a strategy to minimize the risk by diversifying the investment in various sectors. It is allocating the fund in various ways, including separate financial institutions, diverse industries, and investment type....

Disintermediation (Strategy) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Strategy, Entrepreneurship, & Innovation

What is a Disintermediation Strategy?In simple words, disintermediation means removal of the intermediaries or middlemen from a supply chain (sales) or transaction (finance). These intermediaries include brokers, agents, wholesaler, distributor, banks and other...

Differentiation (Strategy) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Strategy, Entrepreneurship, & Innovation

What is a Differentiation Strategy?Differentiation is a strategy for showcasing unique attributes of a product or service to differentiate it from the other existing competing products or services in the market. It intends to convince the customer that a particular...

Demand-Supply Analysis – Explained

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

What is a Demand-Supply Analysis?In a market economy, the level of demand and supply of all goods and services jointly determines the price level and quantity of that good (or service) in the economy.When to Use Supply Demand Analysis?The law of demand states that...

Edge Act Corporation – Explained

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

What is an Edge Act Corporation?An Edge Act Corporation (EAC) is a subsidiary of a U.S. bank that engages in international banking activities. These banks or subsidiaries are named after the 1919 Edge Act, which authorizes banks to perform international banking...

Economies of Scope – Explained

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

What are Economies of Scope?Economies of scope refer to lowering the average cost of goods and services by producing different products simultaneously. Economies of Scope versus Economies of Scale?Economies of scope is different from economies of scale, where...

Economic Growth Tax Relief Reconciliation Act – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Taxation

What is the Economic Growth Tax Relief Reconciliation Act?The Economic Growth Tax Relief Reconciliation Act of 2001 (EGTRRA) was signed into law by President George W. Bush to reform tax rates. EGTRRA is a US tax law that significantly altered retirement plan rules...

Easy Monetary Policy – Explained

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

What is Easy Money?Easy money is an economic term used to describe money supply. It is also known as monetary easing and expansionary monetary policy. What is Monetary Easing?Monetary easing increases the supply of money in the economy by making access to capital...

Earnings Per Share – Explained

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

What are Earnings Per Share?Earnings per share (EPS) is an accounting measure. It is calculated by deducting preferred dividends from net income and then dividing that number of outstanding common shares. Preferred shareholders receive preferential payments before...