What is a Stock Keeping Unit (SKU)? A stock keeping unit or SKU (pronounced “skew”) is a number that is assigned to a product for the purpose of inventory management and ease of tracking. In other words, a stock keeping unit is a unique identifier assigned to each product for easier and more efficient record-keeping….
What is the Average Annual Growth Rate (AAGR)? The average annual growth rate (AAGR) is the average annual appreciation in the value of an investment asset, portfolio, or cash flow. It is determined by taking the numerical mean of specified or calculated year-on-year growth rates. The average annual growth rate is used for many fields…
What is a Bank Draft? A bank draft is a convenient and secure instrument for making large payments without having to withdraw cash from one’s account. Bank drafts are guaranteed by financial institutions and can be used by individuals to make payments to third parties. In most cases, bank drafts can be used to make…
What is a Bank Statement? A bank statement is a monthly financial document that provides a summary of the account holder’s activity. Bank statements are generally prepared by the bank for the account holder at the end of each month. Bank statements can be found online via online banking or be obtained from a branch…
What is Bank Rating? Bank rating is a measure of financial soundness for banks. Just like credit agencies such as Standard & Poor’s (S&P), Moody’s, and Fitch that give credit ratings to individual consumers and corporations, the Federal Deposit Insurance Corporation (FDIC) assigns credit ratings to banks and other financial institutions. Bank ratings are generally…
What is the Alternative Depreciation System (ADS)? The Alternative Depreciation System (ADS) is a method of calculating the depreciation of certain types of assets in special circumstances. The ADS system is required by the Internal Revenue Service (IRS), and it typically increases the number of years over which the asset is depreciated. Therefore, it reduces…
What is a Minimum Monthly Payment? A minimum monthly payment is the lowest amount that must be paid in a month regarding a revolving credit facility, such as a credit card. If the user of the revolving credit does not make the minimum monthly payment, they may be charged late fees and risk damaging their…
What is the Most-Favored-Nation Clause? The most-favored-nation clause is a stipulation that requires a country to provide concessions, privileges, or immunities that are to be granted to one nation in a trade agreement or to be granted to all other countries that are members of the World Trade Organization (WTO). In international economic relations, it…
What is the Arrow’s Impossibility Theorem? Arrow’s Impossibility Theorem is an important mathematical result in the field of collective choice and welfare economics. It is a sub-field of economics and deals with how decisions are made on a collective level. The theorem comes with some important consequences for democratic processes like voting. Arrow’s Impossibility Theorem…
