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What Is Deflation? What Could Deflation Do During a Recession

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What is deflation? What could deflation do during a recession?


Definitions:

Financial Leverage

The use of borrowed money (debt) in an effort to increase the potential return of an investment.

Liquidity and Working Capital

The ability of a company to meet its short-term obligations using its most liquid assets, and the difference between current assets and current liabilities, respectively.

Capital Intensity Ratio

A financial metric that measures the amount of capital required to generate one dollar of revenue, indicating how capital-intensive a business is.

Total Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue, calculated as net sales divided by total assets.

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