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Changing in net working capital: it is the cost or revenue related to the company's short-term asset like inventory. Capital spending: this is the cost or gain related to the company's fix asset such as the cash used to buy a new equipment or the cash which is gained from selling an old equipment.
Stocks and flows in accounting. Thus, a stock refers to the value of an asset at a balance date (or point in time), while a flow refers to the total value of transactions (sales or purchases, incomes or expenditures) during an accounting period. If the flow value of an economic activity is divided by the average stock value during an accounting ...
In economics, a cycle of poverty or poverty trap is when poverty seems to be inherited, preventing subsequent generations from escaping it. [ 1] It is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. [ 2] It can persist across generations, and when applied to developing ...
Working capital. Working capital ( WC) is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital is equal to current assets.
Labour economics, or labor economics, seeks to understand the functioning and dynamics of the markets for wage labour. Labour is a commodity that is supplied by labourers, usually in exchange for a wage paid by demanding firms. [ 1][ 2] Because these labourers exist as parts of a social, institutional, or political system, labour economics must ...
The Modigliani–Miller theorem (of Franco Modigliani, Merton Miller) is an influential element of economic theory; it forms the basis for modern thinking on capital structure. [ 1] The basic theorem states that in the absence of taxes, bankruptcy costs, agency costs, and asymmetric information, and in an efficient market, the enterprise value ...
The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. between economic agents. The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction. The circular flow analysis is the basis of ...
The wage–fund doctrine is a concept from early economic theory that seeks to show that the amount of money a worker earns in wages, paid to them from a fixed amount of funds available to employers each year ( capital ), is determined by the relationship of wages and capital to any changes in population. In the words of J. R. McCulloch, [1]