Free cash flow (FCF) means the amount of cash remaining with the company after paying for its operating costs, inventory and to buy fixed assets. Which means the cash flow from operating activities minus capital expenditures during the financial year.We can also define free cash flow as the amount of money the company has generated after accounting all cash outflows that … [Read more...] about Free cash flow (FCF): How to calculate and interpret
What is Trade deficit and how it impacts the economy
Trade deficit of a country means its import for a period exceeds its export. Which means a trade deficit occurs when there is a negative balance in an international transaction.For instance, suppose in the year 2022 a country has exported $ 3 trillion in goods and services while it imports $ 4 trillion, the net result is $ 1 trillion trade deficit of that country.In … [Read more...] about What is Trade deficit and how it impacts the economy
What are CPI and WPI inflation rates in economics
Government releases data related to consumer price index (CPI) and wholesale price index (WPI) of the country. WPI and CPI are the most commonly used measures to determine inflation.Inflation is a rate at which prices of goods and services are rising in an economy. Inflation is always expressed as a percentage.The main purpose of calculating consumer price index (CPI) … [Read more...] about What are CPI and WPI inflation rates in economics
Inflation, Deflation, Stagflation, and Shrinkflation Explained: Meaning, Causes, Measurement, and Economic Impact
Inflation is one of the most familiar words in economics. It's often used to describe the impact of rising oil or food prices on the economy. For example, if oil prices go up by $25 per barrel, then input cost of business and transportation costs will increase. In response, the cost of many other products and services will rise.Inflation may plunge countries into a … [Read more...] about Inflation, Deflation, Stagflation, and Shrinkflation Explained: Meaning, Causes, Measurement, and Economic Impact
Operating Profit: Definition, Formula and Use
Profit is vital for monitoring a company's performance as it represents positive net cash flow to the business.In business, profits, earnings and incomes are used interchangeably. It's the amount that is left over after accounting all the expenses against revenue. We have different types of profits calculated based on how expenses are incurred by the company. One of such … [Read more...] about Operating Profit: Definition, Formula and Use