CONSUMPTION SMOOTHING Definition

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CONSUMPTION SMOOTHING is aimed at protecting consumption patterns from the impact of shocks, and can take effect either before or after their occurrence. Post-shock responses include modifying consumption, raising income by mobilizing labor or selling assets, drawing on informal or formal sources of savings, or activating claims on informal insurance mechanisms.

Learn new Accounting Terms

PROFIT BEFORE TAXES (PBT) is a profitability measure that looks at a companys profits before the company has to pay income tax. This measure deducts all expenses from revenue including interest expenses and operating expenses, but it leaves out the payment of tax.

STRIPPED PRICE, for a preferred stock, is the market price minus the theoretical dividend.

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