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Term of the Day...supply-side economics

Posted on 5 October, 2016 at 14:22 Comments comments (0)

Term of the Day...supply-side economics
An economic theory which holds that reducing tax rates, especially for businesses and wealthy individuals, stimulates savings and investment for the benefit of everyone. also called trickle-down economics.

Some congressional Republicans have used supply-side economics to argue for either a steep reduction or an outright elimination of the capital gains tax rate as a means to spur investment in the United State economy.Usage Example

Term of the Day...Reaganomics

Posted on 4 October, 2016 at 12:35 Comments comments (0)
Term of the Day...Reaganomics
Economic program utilized during the Reagan administration, which emphasized low taxes, decreased economic regulation, low social services spending, and high military spending. Contributed to low interest rates, low inflation, and large budget deficits. Some of the major legislations passed during his presidency included the Economic Recovery Tax Act of 1981, the Tax Equity and Fiscal ...

When our CEO met with the President of the United States, he joked that he would like to see a return to the low taxes and regulation and high defense spending of Reaganomics.Usage Example

Term of the Day...cottage industry

Posted on 3 October, 2016 at 12:32 Comments comments (0)
Term of the Day...cottage industry
An industry where the creation of products and services is home-based, rather than factory-based. While products and services created by cottage industry are often unique and distinctive given the fact that they are usually not mass-produced, producers in this sector often face numerous disadvantages when trying to compete with much larger factory-based companies.

You may find that you are in a cottage industry and will need to find new ways to work around the problems.Usage Example

Term of the Day...division of labor

Posted on 30 September, 2016 at 12:25 Comments comments (0)
Term of the Day...division of labor
An approach to the completion of a complex task which involves breaking the task into a number of simpler tasks and assigning these tasks to specialists who generally perform only their assigned task.

I knew we had to implement some division of labor because doing it as one big workload would be too much.Usage Example

Term of the Day...Cost Of Goods Sold

Posted on 29 September, 2016 at 12:18 Comments comments (0)
Term of the Day...Cost Of Goods Sold
COGS. An income statement figure which reflects the cost of obtaining raw materials and producing finished goods that are sold to consumersCost of Goods Sold = Beginning Merchandise Inventory + Net Purchases of Merchandise - Ending Merchandise Inventory.

For example:
Beginning Merchandise Inventory = $150,000
Net Purchases of Merchandise = $400,000
Ending Merchandise Inventory = $125,000
COGS = ...

My boss asked me to take the amount of money we spent on raw materials and production of our product to calculate our overall cost of goods sold.Usage Example

Term of the Day...free cash flow

Posted on 28 September, 2016 at 15:30 Comments comments (0)
Term of the Day...free cash flow
Operating cash flows (net income plus amortization and depreciation) minus capital expenditures and dividends. Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investmentsNegative free cash flow is not necessarily an indication of a bad company, however, since many young companies put a lot of their cash into investments, ...

You should always try to keep a free cash flow going so it is easier for you to do your daily business.Usage Example

Term of the Day...supply curve

Posted on 27 September, 2016 at 12:35 Comments comments (0)
Term of the Day...supply curve
A graph showing the hypothetical supply of a product or service that would be available at different price points. The supply curve usually slopes upward, since higher prices give producers an incentive to supply more in the hope of making greater revenue. In the short run the price-supply trade off is greater than in the long run. In the short run, an increase in price will usually cause an...

When my company saw that oil prices were going up, it decided to start producing more oil to adhere to the supply curve.Usage Example

Term of the Day...fiscal year

Posted on 26 September, 2016 at 12:18 Comments comments (0)

Term of the Day...fiscal year
A 12-month period over which a company budgets its spending. A fiscal year does not always begin in January and end in December; it may run over any period of 12 months. The fiscal year is referred to by the date in which it ends. For example, if a company's fiscal year ends October 31, 2006, then everything between November 1, 2005 and October 31, 2006 would be referred to as FY 2006. 
Usage Example
It was the beginning of the fiscal year and things were looking to be a whole lot different for everyone this time around.

Term of the Day...monopolistic competition

Posted on 23 September, 2016 at 12:19 Comments comments (0)
Term of the Day...monopolistic competition
market structure in which several or many sellers each produce similar, but.slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole.

There was a lot of monopolistic competition because each of the companies sold similar but differentiated items.Usage Example

Term of the Day...current assets

Posted on 22 September, 2016 at 12:17 Comments comments (0)
Term of the Day...current assets
balance sheet item which equals the sum of cash and cash equivalents,accounts receivableinventorymarketable securitiesprepaid expenses, and other assets that could be converted to cash in less than one year. A company's creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt.
Usage Example
When the company presents its financial statement to investors every year,current assets are a very important item because it shows exactly how much capital the company has.