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Average Propensity to Consume |
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Definition of Average Propensity to ConsumeAverage Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume.
Related Terms:Arithmetic average (mean) rate of returnArithmetic mean return. AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Average (across-day) measuresAn estimation of price that uses the average or representative price of a Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. Consumer creditCredit granted by a firm to consumers for the purchase of goods or services. Also called Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Moving averageUsed in charts and technical analysis, the average of security or commodity prices Simple moving averageThe mean, calculated at any time over a past period of fixed length. Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Weighted average lifeSee:average life. Weighted average maturityThe WAM of a MBS is the weighted average of the remaining terms to maturity Weighted average remaining maturityThe average remaining term of the mortgages underlying a MBS. Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. WEIGHTED AVERAGEAn inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale. Weighted average cost of capitalSee cost of capital. Weighted averageA method of accounting for inventory. weighted-average cost of capitalWeighted means that the proportions of Average Collection Periodaverage number of days necessary to receive cash for the sale of Weighted Average Cost of Capital (WACC)The weighted average of the costs of the capital components weighted average cost of capitala composite of the cost of the various sources of funds that comprise a firm’s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value weighted average method (of process costing)the method of cost assignment that computes an average cost per Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging Average inventoryThe beginning inventory for a period, plus the amount at the end of Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. average tax rateTotal taxes owed divided by total income. Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. weighted-average cost of capital (WACC)Expected rate of return on a portfolio of all the firm’s securities, adjusted for tax savings due to interest payments. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. Marginal Propensity to ConsumeFraction of an increase in disposable income that is spent on consumption. Marginal Propensity to ImportFraction of an increase in disposable income that is spent on imports. Marginal Propensity to SaveFraction of an increase in disposable income that is saved. Consumer Credit Protection ActA federal Act specifying the proportion of Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Weighted Average Cost of Capital (WACC)A weighted average of the component costs of debt, preferred shares, and common equity. Also called the composite cost of capital.
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