Okun’s law is an economic rule of thumb that states that for every 1% increase in a nation’s unemployment rate, its GDP will decline by approximately 2.5%. The law is named after Arthur Okun, who first proposed it in 1962. Okun’s law is often cited as a key reason why reducing unemployment is important for … Read more
The Bonferroni test is a statistical test used to control for Type I error, or false positives, in multiple hypothesis testing. The Bonferroni test adjusts the p-value for each individual hypothesis test by dividing it by the number of tests being performed. This effectively lowers the threshold for significance, and therefore increases the likelihood of … Read more
Net present value of growth opportunities (NPVGO) is a valuation metric used to estimate the intrinsic value of a company. NPVGO is calculated by taking the present value of all future cash flows from growth opportunities and subtracting the present value of all future costs associated with those opportunities. The idea behind NPVGO is that … Read more
The K-Ratio is a tool used by fundamental analysts to measure a company’s financial health. It is calculated by dividing a company’s market capitalization by its book value. The resulting number is then compared to similar companies in the same industry to gauge the company’s financial health. A high K-Ratio indicates that the company is … Read more
Characteristic line definition is a phrase used in technical analysis that refers to a line drawn on a price chart that connects a series of past price points. This line is used to help identify trends and predict future prices. How do you add a characteristic line in Excel? To add a characteristic line in … Read more
What You Need to Know About Capital Intensive Activities What is best way to learn technical analysis? There is no definitive answer to this question as different traders have different preferences and opinions on what is the best way to learn technical analysis. However, here are some general tips that may be useful: 1. Read … Read more
A fully depreciated asset is an asset that has been fully written off for tax purposes. This means that the asset has been used for its entire useful life and can no longer be used to generate income. The asset may still have some value, but it is not considered to be an active part … Read more
What Is Sample Distribution? Sample distribution is a statistical tool that is used to understand how a given set of data is distributed. This is done by looking at the mean, median, and mode of the data set. How do you know if a sample is normally distributed? There are several ways to determine if … Read more
. Debt-to-EBITDA Ratio: Definition and Calculation. What is EBITDA in simple terms? EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company’s financial performance that excludes these items in order to better gauge its operating cash flow. EBITDA is often used as a proxy for a company’s cash … Read more
