ABNORMAL RETURNS Definition

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ABNORMAL RETURNS is the difference between the actual return and that is expected to result from market movements (normal return).

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QUICK RATIO (or Acid Test Ratio) is a more rigorous test than the Current Ratio of short-run solvency, the current ability of a firm to pay its current debts as they come due. This ratio considers only cash, marketable securities (cash equivalents) and accounts receivable because they are considered to be the most liquid forms of current assets. A Quick Ratio less than 1.0 implies "dependency" on inventory and other current assets to liquidate short-term debt. Formula: (Cash + Cash Equivalents + Accounts Receivable) / Total Liabilities

PURCHASE DISCOUNT is a reduction in the purchase price, allowed if payment is made within a specified period.

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