What is an Average Return? Average return is the mathematical average of a sequence of returns that have accrued over time. In its simplest terms, average return is the total return over a time period divided by the number of periods. Average return, as in simple average, is calculated by adding a set of numbers…
What is an Expansion Project? In the world of finance, an expansion project is literally any project that works to expand the reach of a company. In most cases, such projects involve producing new products or moving into new markets. It may also involve simply increasing the sales of existing goods and introducing them into…
What is the Average Outstanding Balance? The average outstanding balance is the amount owed to a lender, including the balance after the last monthly payment and any interest accrued over time – usually after a month. A credit balance or installment that is subject to an interest rate qualifies to be an average outstanding balance….
What is Operations Management? Operations management is a field of business concerned with the administration of business practices to maximize efficiency within an organization. It involves planning, organizing, and overseeing the organization’s processes to balance revenues and costs and achieve the highest possible operating profit. An operations manager is tasked with ensuring that the organization…
What is Accepting Risk? Accepting risk is a concept where an individual or business identifies risk and renders it acceptable, thereby making no effort to reduce or mitigate it. The potential loss from the identified and accepted risk is considered bearable. The concept of risk acceptance is commonly applicable in investment fields and…
What is Organic Growth? Organic growth is the process by which a company expands on its own capacity. In an organic growth strategy, a business utilizes all of its resources – without the need to borrow – to expand its operations and grow the company. Organic growth is typically marked by an increase in output,…
What is Average Life? Average life is the length of time that each unit of unpaid principal is expected to remain outstanding. The average life of mortgages, bonds, and loans refers to the estimated time to pay principal through amortization or sinking funds. Some issued assets such as bonds include purchase funds that enable the…
What is an Account Statement? An account statement is a periodic report that is sent to a customer. It contains a summary of account activity within a defined period – usually a month, quarter, year, or other custom periods. Examples of account statements may include credit card statements, brokerage account statements, and checking account statements….
What is an Account Balance? An account balance is the amount of money present in a financial repository during the current accounting period. It is the net difference between the credits and debits posted in any given accounting cycle, added to the balance carried forward from the previous month. An account balance may…
What is Backward Integration? Backward integration is a process in which a company acquires or merges with other businesses that supply raw materials needed in the production of its finished product. Businesses pursue backward integration with the expectation that the process will result in cost savings, increased revenues, and improved efficiency in the production process….
