Month: December 2020

The operating cash flow ratio is a measure of how well current liabilities are covered by the cash flows generated from a company’s operations. The ratio can help gauge a company’s liquidity in the short term. Using cash flow as opposed to net income is considered a cleaner or more accurate measure since earnings are more easily manipulated.

A recessionary gap is a macroeconomic term which describes an economy operating at a level below its full-employment equilibrium. Under a recessionary gap condition, the level of real gross domestic product (GDP) is lower than the level of full employment, which puts downward pressure on prices in the long run.

Unbanked is an informal term for adults who do not use banks or banking institutions in any capacity. Unbanked persons generally pay for things in cash or else purchase money orders or prepaid debit cards. Unbanked persons also typically do not have insurance, pensions, or any other type of professional money-related services. They may take advantage of alternative financial services, such as check-cashing and payday lending, if such services are available to them.

The Federal Reserve System (FRS) is the central bank of the U.S. The Fed, as it is commonly known, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C., the Board of Governors, and 12 regional Federal Reserve Banks in major cities throughout the U.S.

Cost of capital is the required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. When analysts and investors discuss the cost of capital, they typically mean the weighted average of a firm’s cost of debt and cost of equity blended together.

The European Banking Authority (EBA) is a regulatory body that strives to maintain financial stability throughout the European Union’s (EU) banking industry. It was established in 2010 by the European Parliament, replacing the Committee of European Banking Supervisors (CEBS).

An exculpatory clause is a contract provision that relieves one party of liability if damages are caused during the execution of the contract. The party that issues the exculpatory clause is typically the one seeking to be relieved of the potential liability. For example, a venue may print an exculpatory clause on tickets it sells for a concert, indicating that it is not responsible for personal injury caused by employees or others during the show.

A feed-in tariff is an economic policy created to promote active investment in—and production of—renewable energy sources.

An exculpatory clause is a contract provision that relieves one party of liability if damages are caused during the execution of the contract. The party that issues the exculpatory clause is typically the one seeking to be relieved of the potential liability. For example, a venue may print an exculpatory clause on tickets it sells for a concert, indicating that it is not responsible for personal injury caused by employees or others during the show.

A feed-in tariff is an economic policy created to promote active investment in—and production of—renewable energy sources.