What Are Economies of Scale in Financial Transactions? How Can

question 58

Essay

What are economies of scale in financial transactions? How can financial intermediaries achieve these economies?

---

Definitions:

Market Value Added

A calculation that shows the difference between the market value of a company and its capitalized value on the balance sheet.

EBITDA Coverage Ratio

A financial ratio that measures a company's ability to pay off its incurred debt, calculated by dividing EBITDA by total debt service costs.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the degree of leverage and financial risk.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated by comparing the profit and the revenue.