Working capital is computed by subtracting a business’s current liabilities from its current assets.
Current means that the assets and liabilities exist within the current year. The appropriate amount of working capital will vary from business to business. Some businesses have a need for a large amount of working capital, and some can maintain a healthy balance sheet with relatively little working capital. Whatever the situation is for a particular business, the approximate calculation for the amount of working capital that they have to use is arrived at by subtracting current liabilities from current assets.
Current assets includes cash and cash equivalents and current-year receivables. Current liabilities may include all current expenses down to the taxes owed for income and payroll, whatever is payable in the current year. Adequate working capital means that companies do not have to tie up assets to secure a line of credit.
A lifetime income annuity, or a life annuity, is a stream of guaranteed payments for the duration of the annuitant’s life
Mining is the act of letting one’s computer run what’s known as the “hash function” over and over and over in an attempt to crack the codes on the blocks that need validation
The Security Market Line (SML) is a visualization of the Capital Asset Pricing Model (CAPM) and shows thee relationship between risk and return in trading
When a company “deleverages,” it means it is attempting to shrink the amount of debt on its books relative to its assets
The Foreign Exchange is abbreviated Forex, and it refers to the global network of 24/7 currency trading
A takeover is an acquisition done through the procurement of enough equity interest to govern a company from the B of D
An uptick is an incremental increase in the trading price of a security. How much this rule works has been debated
Collateralized Debt Obligations (CDOs) are bond-like investments backed by debts such as mortgages
The EPMA uses linear regression instead of averages to plot a line which reduces the noise of market activity
Counter-party risk is the risk that the person on the other side of the trade will not meet his or her obligations