Search Results for what is normalization?

What is Normalization? Financial statements normalization involves adjusting non-recurring expenses or revenues in financial statements or metrics so that they only reflect the usual transactions of a company. Financial statements often contain expenses that do not constitute a company’s normal business operations and that may hurt the company’s earnings. The purpose of normalization is to...

What is Normal Distribution? The normal distribution is also referred to as Gaussian or Gauss distribution. The distribution is widely used in natural and social sciences. It is made relevant by the Central Limit Theorem, which states that the averages obtained from independent, identically distributed random variables tend to form normal distributions, regardless of the...

What are Normal Goods? Normal goods are a type of goods whose demand shows a direct relationship with a consumer’s income. It means that the demand for normal goods increases with an increase in the consumer’s income or expansion of the economy (which generally will increase the income of the population).     Normal goods demonstrate...

What is Normalized EPS? Normalized EPS refers to adjustments made to the income statement to reflect cycles of the economy, as well as adjustments that include removing unusual or one-time expenses that do not reflect the usual operations of the company. Normalized EPS is intended to present an accurate picture of the company’s actual financial...

What are Normalized Earnings? Normalized earnings refer to adjustments made to financial statements to eliminate one-off effects that may impact the net income. A fundamental premise of normalizing earnings is to help financial analysts, investors, and other stakeholders gain insights into a company’s actual financial performance from its core business operations.     Normalizing a...

What is Normal Profit? Normal profit is an economic term that refers to a situation where the total revenues of a company are equal to the total costs in a perfectly competitive market. It means that the company makes sufficient revenues to cover the overall cost of production and remain competitive in its respective industry....

What is Economics? Economics comes from the ancient Greek word “oikonomikos” or “oikonomia.” Oikonomikos literally translates to “the task of managing a household.” French mercantilists used “economie politique” or political economy as a term for matters related to public administration.     Adam Smith’s Definition of Economics Adam Smith was a Scottish philosopher, widely considered...

What is FAASF? FAASF, or “file as a spouse first,” is one of several Social Security filing options for claiming benefits. In FAASF, a spouse can file for Social Security and spousal benefits from his/her spouse’s higher-earning Social Security account up until the age of 70.   What is Social Security? Social Security in the...

What is the MD&A section of financial reporting? The Management Discussions and Analysis (MD&A) is a section of the annual report or SEC filing 10-K that provides an overview of how the company performed in the prior period, its current financial condition, and management’s future projections. It helps potential investors understand the company’s financial fundamentals...

What is Bookkeeping? Bookkeeping involves the recording, on a regular basis, of a company’s financial transactions. With proper bookkeeping, companies are able to track all information on its books to make key operating, investing, and financing decisions. Bookkeepers are individuals who manage all financial data for companies. Without bookkeepers, companies would not be aware of...