Author: Max Holmes

In general economic terms, elasticity refers to how responsive a variable is to another variable. Most often, the term elasticity is applied to how demand for a product changes depending on the price.  Mathematically, this is expressed as a ratio of the change in price to  the change in quantity demanded.   Elasticity =  Percent […]

In investing, an expense ratio refers to an annual fee that an investment company will charge to cover the operating costs of managing a mutual fund. An expense ratio will typically be calculated annually by dividing a fund’s operating expenses by the average dollar value of assets under management. The expense ratio not only includes […]

Free cash flow, often abbreviated as FCF, is a common measure of a company’s financial performance. It is determined by subtracting capital expenditures from operating cashflow. Specifically, the formula commonly used for FCF is as follows: Earnings before interest and taxes (1-tax rate) + (depreciation) + (amortization) – (change in networking capital) – (capital expenditure) […]