# Category: Financial Analysis

## CAPM Model: Advantages and Disadvantages

The widely used capital asset pricing model (CAPM)—when put into practice—has both pros and cons. CAPM Model: An Overview The capital asset pricing model (CAPM) is a finance theory that…

## How Accretion Works—And Matters to You

What Is Accretion? Accretion refers to the gradual and incremental growth of assets and earnings growth to business expansion, a company's internal growth, or mergers and acquisitions. In finance, accretion…

## Capitalization Table is a familiar document in the startup world

What Is a Capitalization Table? A capitalization table is a spreadsheet or table that shows the equity capitalization for a company. A capitalization table is most commonly utilized for startups…

## Understanding Geometric Mean

What Is the Geometric Mean? The geometric mean is the average of a set of products, the calculation of which is commonly used to determine the performance results of an…

## Correlation Coefficient Definition

What is the Correlation Coefficient? The correlation coefficient is a statistical measure that calculates the strength of the relationship between the relative movements of two variables. The values range between…

## Standard Error of the Mean vs. Standard Deviation: The Difference

The standard deviation (SD) measures the amount of variability, or dispersion, for a subject set of data from the mean, while the standard error of the mean (SEM) measures how…

## Disadvantages of Net Present Value (NPV) for Investments

While net present value (NPV) calculations are useful when valuing investment opportunities, the process is by no means perfect. Thus, NPV is a useful starting point for valuing investments, but…

## Understanding Momentum Indicators and RSI

Every book dealing with the subject of technical analysis devotes at least a couple of chapters discussing both momentum and the relative strength index (RSI). For those of you not familiar…

## How the High-Low Method Works

What Is the High-Low Method? In cost accounting, the high-low method is a way of attempting to separate out fixed and variable costs given a limited amount of data. The…

## What You Should Know Operating Activities

What Are Operating Activities? Operating activities are the functions of a business directly related to providing its goods and/or services to the market. These are the company's core business activities,…