Finance thinking and forethoughts
Thoughts experimented by empirical and hypothesis test
Good Government will work out - balancing surplus and deficits in their fiscal budget.
Best of Best governance do keep capital reserves and provisions. Reserve requirement is regulated by central bank of country. Central Banks should do well and good in this aspect to boost up businesses and economy growth
Thumb rule of any business -liquid cash is inversely proportional to the solvency ratio. meaning any business organization should have potential to solve its liabilities at specific point of time and its convertible cash. Its a financial saying. But i always have a strong belief in my ancestors equation -liabilities affects love and personal relations
Standard Deviation
In a Business- numbers keep changing Y-O-Y, Quarterly or over the time period. It can be a sale revenue or drop, it can be a swing in margins or any other asset elements. I would always suggest to business finance to use spreads, outliers, plot disperse set of data or measure quantities that had moved away from the data set- how this can be done - simple way- the equation is to calculate standard deviation
Inflation and Okuns Law-
Enonomy growth and inflation rate are the both sides of pendulum-they swing! Government keeps inflation under control is a positive element for a common man - business has adverse impacts - but respective country government should keep things under control for both business and common man
Logic behind Okun's law - output depends on amount of labor used in production process. Aggregate output is between 1.3-2% for every 1-percent-pt increase in total employment - many governments use okuns law as a indicator to calculate country's productivity and unemployment ratio.
Self questions and answers
How economic growth is increased? Many people say economic is uncertain and see slumps. Why did not people talk about inflation under control
How do business think about capex vs opex?
According to me- Stable cashflows will have well deserved operating history
I would say trust is vital for any forms it can be personal, professional or ethical business
Important tool for business research and statistics- Hypothesis test
Good article.
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