auditor's report
Document prepared by the auditors appointed to examine and certify the accounting records and financial position of a firm. It must be filed every year by an incorporated or registered firm (along with its audited financial statements) with the appropriate regulatory authority. Also called audit report.
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dependent variable
Factor or phenomenon that is changed by the effect of an associated factor or phenomenon called independent variable. For example, consumption is a dependent variable because it is caused and influenced by another variable income. In a mathematical equation or model, it is the variable whose value is to be determined by that equation or model. In an experiment, it is the variable whose behavior under controlled conditions (that are allowed to change in an organized manner) is studied.
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working capital
Current assets minus current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current capital.
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acceleration principle
Concept in economics that explains the link between output and capital investment. It states that an increase or decrease in the demand for consumer goods will cause a greater increase or decrease in the demand for machines required to make those goods. In other words, there is a direct relationship between the rate of output of an economy and the level of investment in capital goods. Also called accelerator principle.
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quality loss function
Mathematical formula that estimates the loss of quality resulting from the deviation of a product characteristic from its target value. Developed by Dr. Genichi Taguchi of Japan, it is often expressed in terms of money lost, and suggests that such losses increase geometrically as the square of the deviation from the target. See also Taguchi method.
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