To calculate this ratio, find the company’s earnings before interest and taxes (EBIT), then divide by the interest expense of long-term debts. Use pretax earnings because interest is tax-deductible; the full amount of earnings can eventually be used to pay interest. Again, higher numbers ar...
Similarly, for producer surplus, we use the equilibrium quantity of 40, the equilibrium price of $50, and a minimum price the producer would accept—equivalent to the cost of production. Let’s assume it’s $20 on the y-axis. We calculate producer surplus: Producer surplus = (½) [40...
For manufacturers and other suppliers, the marginal benefit for a good represents the incremental profit that they can make by selling additional units of a certain good. This is not necessarily the same as the expected per-unit profit. For example, if a company decides to sell an additional ...
How to Calculate Total Sales Revenue in Economics. Total sales revenue, sometimes called gross sales, is the total amount of sales in a given period. Total sales revenue can be represented in several ways, but it is typically formulated as total number o
Jon has taught Economics and Finance and has an MBA in Finance Cite this lesson Market equilibrium is accomplished when the supplier and the buyer agree on a price. Discover how shortages and surpluses affect market equilibrium, how to calculate market equilibrium, and how to illustrate it grap...
Looking inwards, producers must calculate which assets — including both human capital assets and physical assets — in which combination result in the greatest value for customers at the least cost. This requires an evaluation that assesses value flowing to the customer from the firm. Since value...
What is the best way to invest in gold? How do beginners invest in gold? Is gold a good investment during a recession? What are the benefits and drawbacks of investing in gold bars and coins? What are the cost-effective ways to invest in gold?
But making decisions can be hard too; automation means you only have to make the decision once," says Brianna Middlewood, director of behavioral economics research at Fidelity. Think about the most effective automated investment plan around: the workplace savings plan. The money you contribute ...
These studies have highlighted the significance of investment as a driving force for large-scale economic activity. At the firm level, the contribution of tangible investment to firm growth has been studied unevenly. The linear link between investment and sales growth has been the topic of a few...
The internal integration of ESG principles into firm operations is referred to as sustainable development [2], defined in corporate activities as balancing current sustainability with economic, environmental, and social aspects while also addressing company systems, such as operations and production, the ...