What are diseconomies of scale and how do they impact businesses
Diseconomies of scale refer to the point at which a business starts to experience larger per-unit costs as it expands its operations. There are a number of factors that...
Let’s say you’ve successfully graduated from the bootstrap phase – that precarious first stage in a startup’s life when it scrapes together whatever money it can get to develop a plan and prototype. You’ve knocked on friends’ doors, maxed...
When running a business, financial stability and growth may be the most critical goals to accomplish. For that reason, almost everything you do on a day-to-day basis occurs with the financial stability of your company in mind.
In today’s world...
What is the substitution effect
The substitution effect is a key concept in economics that refers to the change in demand for a good or service that results from a change in its price. In other words, the substitution effect...
What is liquidity ratio
The liquidity ratio is a financial metric that measures a company's ability to pay off its short-term debts. The higher the ratio, the more capable the company is of meeting its obligations. The liquidity ratio is...
What is misrepresentation and what are the consequences
Misrepresentation is a false or misleading claim made about a product or service. It can occur in advertising, selling, or even in reviews and testimonials. Misrepresentation is harmful because it leads people...
What is hypothecation and how does it work
Hypothecation is the process of pledging collateral to secure a loan. When you hypothecate something, you're using it as security for the debt, meaning that the lender can seize the asset if...
What is an arm's length transaction
An arm's length transaction is a business deal in which the parties involved are not related to each other. This type of transaction ensures that both parties are acting in their own best interests...
What is the interest coverage ratio
The interest coverage ratio is a financial ratio that is used to determine how well a company is able to pay the interest on its outstanding debt. The higher the ratio, the better able...
What is a Special Warranty Deed
A Special Warranty Deed is a type of deed that is typically used in the sale of real estate. As with any deed, the Special Warranty Deed conveys ownership of the property from the...