ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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ACTIVITY RATIO Definition
ACTIVITY RATIO is any accounting ratio that measures a firms ability to convert different accounts within their balance sheets into cash or sales.
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DEDICATED PORTFOLIO, in securities, is a portfolio where the cash flow from assets is matched in timing and amount to known liabilities.
CONSTRUCT OF UTILITY THEORY is a scientific calculation that has an underlying concept of utility in that it is used to rank a series of alternatives and, in the case of a simple choice, identify the single alternative, which has higher utility, or out ranks, all other alternatives. The primary implication of this ranking or ordering of alternatives is that there is no absolute reference, zero point, for utility values. Thus, the only valuation that is important is the difference in utility between pairs of alternatives; particularly whether that difference is positive or negative. Any function that produces the same preference orderings can serve as a utility function and will give the same predictions of choice, regardless of the numerical values of the utilities assigned to individual alternatives. It also follows that utility functions, which result in the same order among alternatives, are equivalent.
