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What Does ‘EBIT’ Mean?
What Does EBIT Mean? EBIT stands for Earnings Before Interest and Taxes and is a managerial accounting measure used by businesses and investors to assess the financial performance of a company. It is a measure of profitability that takes out the effects of taxes and interest payments on debt, allowing analysts and investors to get…
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What Does ‘Double Declining Balance Method’ Mean?
What Is the Double Declining Balance Method? The double declining balance method is a way of calculating depreciation expenses on fixed assets over their useful life. It is one of the ways used by businesses to recognize the decrease in value of long-term assets such as buildings, equipment, and vehicles. The method is also known…
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What Does ‘Diseconomies of Scale’ Mean?
What Is Diseconomies of Scale? Diseconomies of scale is a concept that describes an organization’s costs of production increase as their production increases. When a company produces more, the costs of production per unit rises due to a variety of factors. Generally, these increasing costs are caused by inefficiencies in management, operations, or process, as…
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What Does ‘Deflation’ Mean?
What Is Deflation? Deflation is a decrease in the general level of prices for goods and services – this is in contrast with inflation, which is an increase in the general price level. Deflation is caused by an increase in the purchasing power, which is a result of an increase in the amount of money…
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What Does ‘Debenture’ Mean?
What Is a Debenture? Debentures are a type of debt instrument used by companies to raise capital. They are generally issued by large public corporations, and are secured against the issuing company’s assets. They can be traded on public markets like stocks or bonds. When a company issues a debenture, the borrower promises to pay…
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What Does ‘Cyclical Unemployment’ Mean?
Understanding Cyclical Unemployment As a student studying business and finance, it is important to understand concepts like cyclical unemployment. Cyclical unemployment is a type of unemployment caused by the business cycle, which is characterized by periods of economic expansion and contraction. During recessions or economic downturns, businesses will often reduce their workforce, leading to a…
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What Does ‘Cunsumables’ Mean?
What Are Consumables? Consumables are items that are used up or consumed over time, and must therefore be regularly bought or replaced. They are classed as a type of supply or inventory for businesses, as well as households. Examples of consumables include food, beverages, cleaning supplies, household products, office supplies, and more. Why Are Consumables…
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What Does ‘Credit Life Mortgage Insurance’ Mean?
What Is Credit Life Mortgage Insurance? Credit life mortgage insurance is a type of insurance policy offered by lenders to borrowers who have taken out a loan to buy a house. It is designed to cover payments in the event of death, disability, or involuntary unemployment. The insurance covers the outstanding loan balance, up to…
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What Does ‘CPG Industry’ Mean?
What Is the CPG Industry? The CPG industry (Consumer Packaged Goods Industry) is a sector within the consumer goods marketplace that consists of companies that manufacture products and sell them to retailers to be bought and used directly by consumers. Examples of CPG companies are food companies like PepsiCo, Unilever and General Mills, personal care…
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What Does ‘Cottage Industry’ Mean?
An Introduction to Cottage Industry Cottage industry is an age-old form of business that implies a structure involving products created and produced within the home; usually on a small scale for a local audience. This method of production is often part of a traditional lifestyle, and requires any associated workers to be from the same…
