What is the Pareto Principle?
Definition The Pareto principle states that, for many events, roughly 80% of the effects come from 20% of the causes. Management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896. In his first work, Cours d'économie politique, Pareto showed that approximately...
QSBS (Qualified Small Business Stock)
What is 'QSBS (Qualified Small Business Stock)' A qualified small business stock (QSBS) is simply the stock or share of a qualified small business (QSB). A qualified small business is defined as a domestic and active C-corporation whose gross assets (valued at original cost) do not exceed $50 million as of the date the stock was issued...
Obsolete Inventory
What is 'Obsolete Inventory' An obsolete inventory item is defined as inventory that has reached the end of its product life cycle and has not seen any sales or utilization for a certain length of time, which is generally stipulated by the industry in question. This form of inventory must be written down, and it might result in significant losses...
Pacific Exchange (PCX)
What is 'Pacific Exchange - PCX' An exchange network that coordinates the trading of stock options between both institutional and individual investors. The PCX was one of four U.S. exchanges to trade equity options and the first to develop and implement an electronic trading system. At one time, the PCX had operations in both Los Angeles and...
EBITA
What is 'EBITA' EBITA is an acronym for earnings before interest, taxes and amortization. To calculate a company's EBITA, start with its earnings before tax (EBT), which can be found on the income statement, and add interest and amortization expenses back in. EBITA is a variation of the more commonly used EBITDA, which deducts depreciation expenses. Both are used to gauge a...
Federal Funds Rate
Definition According to the Federal Reserve, the federal funds rate refers to the interest rate at which depository institutions lend reserve balances to other depository institutions on an uncollateralized basis overnight in the United States. Reserve balances are sums of money stored at the Federal Reserve in order to meet the reserve requirements of financial institutions such as banks and...
DCF
DCF means Discounted Cash Flow DCF is closely related to Net Cash Flow DCF focuses on long term value DCF evaluates based on future cash flow Further Reading The economics of short-term performance obsession - www.tandfonline.com Empirical Research of DCF model in Business Appraisal - en.cnki.com.cn ' target='_blank' href='https://api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-ZCPG200407004.htm'>PDF]Probabilistic DCF analysis and capital budgeting and...
CAD
What is 'CAD' What currency is CAD? CAD is the currency abbreviation or currency symbol for the Canadian dollar (CAD). The Canadian dollar is made up of 100 cents, and is often presented with the dollar sign as C$ to allow it to be distinguished from other currencies denominated in dollars, such as the U.S. Dollar (USD)....
Game Changer
What is a 'Game Changer' 1. A person who is a visionary. 2. A company that alters its business strategy and conceives an entirely new business plan. This type of company switches up and forms a new business strategy in order to compete directly or indirectly with competitors. A game changer changes the way that something is...
W-8 Form
What is a 'W-8 Form' A W-8 form is an Internal Revenue Service (IRS) form that provides foreigners with an exemption from specified U.S. information return reporting and backup withholding regulations. There are a variety of W-8 forms. Explaining 'W-8 Form' Non-resident aliens and foreign businesses that earn income from one or more U.S. sources utilize the W-8 form. Its purpose is...