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Amortization and depreciation are two ways to prorate the cost of an asset's life. Learn more about the former and how it it's calculated.
Selling, general and administrative expenses (SG&A) are a company's total direct and indirect costs from selling its product or service as well as its total general and administrative expenses. The company reports its SG&A on the income statement.
The wealth effect is a psychological phenomenon that causes people to spend more as the value of their assets rises. The premise is that when consumers' homes or investment portfolios increase in value, they feel more financially secure, so they increase their spending.
Inventory turnover is a ratio that shows how quickly a company uses up its supply of goods over a given time frame. Inventory turnover may be calculated as the market value of sales divided by ending inventory, or as cost of goods sold (COGS) divided by average inventory.
"Mark-to-market" accounting is a way of valuing assets based on how much they could sell for under current market conditions. In recent decades, it has become the standard way to record financial assets on a company's balance sheet.
The discount rate is the interest rate you need to earn on a given amount of money today to end up with a given amount of money in the future. Let's say you need $1,000 one year from now to go on vacation. We can use the discount rate to determine how much money you would need to have today to have $1,000 in one year.
Most investment choices involve a tradeoff between risk and reward. The "Efficient Frontier" is a modern portfolio theory tool that shows investors the best possible return they can expect from their portfolio, given the level of volatility they're willing to accept.
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