Describe Principal Components Analysis and Common Factor Analysis and the Differences

question 46

Essay

Describe principal components analysis and common factor analysis and the differences between the two methods of factor analysis.

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Definitions:

Unrealised Profit

Profit that has been generated but not yet realized through a transaction, such as an increase in value of an investment that has not yet been sold for cash.

Opening Inventory

The value of a company's inventory at the beginning of an accounting period, which is carried over from the end of the previous period.

Tax Effect

The impact of tax laws and regulations on an individual's or company's financial decisions and situations, including the calculation of tax liabilities.