FINANCIAL ANALYSIS

Coase Theorem The Coase theorem is a fundamental concept in economics that describes the relationship between property rights and externalities. It states that in the absence of transaction costs, the optimal allocation of property rights will result in a situation where externalities are minimized. Key Principles: Transaction Costs: The costs associated with setting up and […]

Definition: Growth rate is a measure of the rate at which a quantity increases or decreases over time. It is typically expressed as a percentage. Formula: Growth rate = (Q – Qo) / Qo * 100% where: Q is the quantity at the end of the time period Qo is the quantity at the beginning […]

Definition: The absolute value of a number is a measure of its distance from zero on the number line. Formula: The absolute value of a number x is denoted by |x| and is defined as: |x| = x if x is positive|x| = -x if x is negative|x| = 0 if x is zero Properties: […]

Law of Large Numbers The law of large numbers is a fundamental principle in probability theory that states that as the number of trials in a random experiment increases, the average of the outcomes will converge to the expected value of the experiment with increasing accuracy. Statement: Given a sequence of independent and identically distributed […]

Definition: A frequency distribution is a tabular summary of grouped data that describes the frequency of occurrence of different values or classes. It provides a breakdown of the data into intervals, or classes, and the number of observations that fall into each interval. Components of a Frequency Distribution: Class Intervals: The intervals used to group […]

Accretion Accretion is the process of matter accumulating on a celestial body, such as a star, planet, or black hole. It is caused by the gravitational attraction between the object and the accreting matter. Mechanism: Gravitational Attraction: The object’s gravity pulls the accreting matter towards itself. Magnetic Fields: If the object has a magnetic field, […]

Gap analysis is a process of comparing the current state of a system or organization with its desired future state. It identifies the gaps between the current and desired states and creates a plan for bridging them. Purpose: To assess the current capabilities and limitations of the system or organization. To identify areas where improvement […]

Standard Error Standard error is a measure of variability in a set of data that describes the range of values that the sample mean could take, given that the sample is randomly selected from the population. It is a quantifiable measure of the uncertainty associated with a sample mean. Formula: Standard Error (SE) = Standard […]

Binomial Distribution The binomial distribution is a probability distribution that describes the number of successes in a sequence of n independent trials, each of which has a probability of success p. Assumptions: The trials are independent. Each trial has a constant probability of success p. The number of trials n is finite. Formula: The probability […]

Systematic Sampling Systematic sampling is a probability sampling method that involves selecting samples at regular intervals from a population. This method is also known as spaced-sample selection or quasi-random sampling. Procedure: Select a sampling frame: Create a list of all elements in the population. Determine the interval: Calculate the interval size, which is the number […]