Category: Financial Terms

Quick Liquidity Ratio What it is The quick liquidity ratio (also called the quick ratio or acid-test ratio) measures a company’s ability to meet short‑term obligations using its most liquid assets—excluding inventory and other hard‑to‑convert items. It is a conservative indicator of short‑term financial strength. Formula For most companies: Quick ratio = (Cash + Marketable…

Quick Assets Key takeaways Quick assets are the most liquid assets a company holds and can be converted to cash quickly with little loss of value. They typically include cash and cash equivalents, marketable securities, and accounts receivable. Quick assets exclude inventory and other less liquid current assets, making them a more conservative liquidity measure…

Queuing Theory What it is Queuing theory is the mathematical study of waiting lines (queues). It models how entities—people, data packets, vehicles, or goods—arrive, wait, receive service, and depart. The goal is to design systems that balance service quality (short waits) with cost (avoiding overcapacity). The field originated with Agner Krarup Erlang’s early 20th‑century work…

Questioned Document Investigation: What it Is and How It Works A questioned document investigation is a forensic examination of documents or items whose authenticity is disputed. It aims to determine whether a document is genuine, identify alterations or forgeries, and, when possible, establish authorship, creation timeframe, and the materials or tools used. When it’s used…

Quasi-Reorganization Key takeaways A quasi-reorganization is an accounting procedure that allows a company to eliminate a retained earnings deficit by restating assets, liabilities, and equity. It is permitted under U.S. GAAP in limited circumstances and requires shareholder approval. The process resets certain accounting balances to reflect fair values but does not change the company’s underlying…

Quasi-Public Corporation: Definition, Structure, and Investor Considerations What is a quasi-public corporation? A quasi-public corporation is a privately operated company that carries a government-backed public mandate to provide a service considered important to the public. These firms operate in the private sector but receive government support—often in the form of funding, charters, or regulatory advantages—to…

Quasi Contract Key takeaways A quasi contract (also called an implied-in-law or constructive contract) is a remedy a court creates when no formal contract exists but one party has been unjustly enriched at another’s expense. It is not an actual agreement between parties but a legal obligation imposed by law to require restitution. Courts typically…

Understanding Quartiles: Definitions, Calculations, and Examples What is a quartile? Quartiles are values that divide a sorted data set into four equal parts, each containing 25% of the observations. The three quartile values are: * Q1 (first or lower quartile) — 25th percentile * Q2 (second quartile) — 50th percentile (the median) * Q3 (third…

Quarterly Revenue Growth: What it Is and How to Use It Quarterly revenue growth measures how a company’s sales change from one quarter to another. It helps investors and analysts assess whether a company is expanding, slowing, or maintaining its sales momentum over short time frames. How it’s calculated Quarter-over-quarter (QoQ): compares a quarter to…

Quarterly Income Preferred Securities (QUIPS) Quarterly Income Preferred Securities (QUIPS) are preferred shares that pay dividends on a quarterly schedule. They combine characteristics of both stocks and bonds and are primarily issued to provide regular income with higher priority to dividends than common equity. Key characteristics Dividend priority: Preferred holders receive dividends before common shareholders…

Quarter-to-Date (QTD) Definition Quarter-to-date (QTD) refers to the period starting at the beginning of the current fiscal quarter and ending at the moment the data is collected. QTD captures all company activity and results within that partial quarter and is used to assess how the quarter is progressing before it closes. Key takeaways QTD summarizes…

What is a fiscal quarter? A fiscal quarter is a three‑month period used by businesses and governments to organize financial reporting, pay dividends, and evaluate performance. Companies typically produce four quarterly reports per fiscal year, commonly referred to as Q1, Q2, Q3, and Q4. Standard calendar quarters When a company follows the calendar year, quarters…

Quarter over Quarter (Q/Q) What Q/Q measures Quarter over quarter (Q/Q) measures the percentage change in a metric—commonly revenue or profit—between one fiscal quarter and the previous quarter. It is a short-term growth indicator used by investors, analysts, and policymakers to detect recent trends in company performance or the broader economy. Key takeaways Q/Q shows…

Quarter on Quarter (QOQ): Definition, Calculation, and Use Key takeaways QOQ measures the percentage change in a metric from one fiscal quarter to the next. It highlights short-term momentum and helps track progress toward near-term goals. QOQ can be misleading for seasonal businesses; complement it with year-over-year (YOY) analysis. What is QOQ? Quarter on quarter…

Quantum Computing: Definition, How It Works, Applications, and Challenges Key takeaways * Quantum computers use qubits, which can represent multiple states at once, enabling certain tasks to be solved far faster than with classical computers. * Core quantum features are superposition and entanglement; decoherence and error correction are major technical barriers. * Potential applications include…

Quanto Swap Definition A quanto swap is a cash‑settled, cross‑currency interest rate swap in which one counterparty pays an interest rate indexed to a foreign currency while all payments are settled in a single (domestic) currency. The notional principal is denominated in the domestic currency, and interest legs can be fixed or floating. Because the…

Quantity Theory of Money Key takeaways The quantity theory of money links changes in the money supply to changes in the general price level. Irving Fisher’s equation of exchange, M × V = P × T, is the standard expression of the theory. The theory assumes stable velocity and output so that changes in money…

Quantity Supplied Key takeaways Quantity supplied is the amount of a good or service producers are willing to sell at a specific price. In a free market, higher prices generally increase quantity supplied; lower prices generally decrease it. Quantity supplied is a single point on the broader supply curve, which shows supply at every possible…

Quantity Discount: Definition, How It Works, Pros & Cons What is a quantity discount? A quantity discount is a pricing incentive that lowers the cost per unit when a buyer purchases larger quantities. Sellers use quantity discounts to encourage bulk purchases, move inventory faster, and increase revenue per transaction. Common consumer examples include buy-one-get-one offers…

Quantity Demanded: Definition and Key Ideas Quantity demanded is the amount of a good or service consumers are willing and able to buy at a specific price during a given time period. It is a single point on the demand curve that corresponds to one price–quantity combination. Law of Demand — The Inverse Relationship The…

Quantitative Trading Overview Quantitative trading uses mathematical models, statistics, and large datasets to identify and execute trading opportunities. Once mainly the domain of hedge funds and large trading firms, quant strategies are increasingly accessible to individual investors and traders who want systematic, emotion-free approaches to the markets. Key points: * Uses data (price, volume, correlations,…

Quantitative Easing 2 (QE2) Quantitative Easing 2 (QE2) was the Federal Reserve’s second large-scale asset-purchase program, announced in November 2010 to support the U.S. recovery after the 2008 financial crisis and Great Recession. The program expanded the Fed’s balance sheet by about $600 billion through purchases of U.S. Treasury securities and by reinvesting proceeds from…

What Is Quantitative Easing? Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate economic activity when conventional tools—mainly cutting short-term interest rates—are exhausted. Under QE, a central bank purchases large quantities of longer-term government bonds and other financial assets from the market, increasing bank reserves and overall liquidity. The aim…

Quantitative Analysis (QA) Definition Quantitative analysis (QA) uses mathematical and statistical techniques to analyze numerical data and support decision-making. In finance, QA helps forecast market trends, price derivatives, model risk, and construct optimized portfolios. Practitioners—often called quants—combine data, models, and software to generate measurable insights. Key takeaways QA focuses on measurable, numerical information rather than…

Quantity-Adjusting Option (Quanto Option) What is a Quanto Option? A quantity-adjusting option, commonly called a quanto option, is a cross-currency derivative in which the underlying asset is denominated in one currency but settlement is made in another at a predetermined (fixed) exchange rate. Quantos exist as calls or puts and are typically traded over the…

Quant Funds: Definition and Overview A quant fund uses mathematical models, algorithms, and large datasets to make investment decisions instead of relying primarily on human judgment. These funds automate stock selection, portfolio construction, and trade execution through systematic rules coded into software. The approach emphasizes data-driven signals—momentum, value, quality, financial strength—and often leverages big data…

Quality Spread Differential (QSD) Quality Spread Differential (QSD) measures the relative credit-cost advantage two counterparties can achieve by entering an interest rate swap. It helps determine whether a swap will be mutually beneficial and gauges counterparty/default risk. Key takeaways QSD quantifies the difference between the credit premia (spreads) that two parties face on fixed-rate versus…

Quality of Earnings Quality of earnings measures how much of a company’s reported earnings come from sustainable business operations (higher sales or lower costs) rather than from accounting adjustments, one‑time events, or other distortions. High-quality earnings are repeatable, supported by cash flow, and reported under conservative accounting choices; low-quality earnings rely on aggressive accounting or…

Quality of Life: Meaning, Factors, and Leading Countries Definition Quality of life is a subjective assessment of overall well-being that blends personal, social, and financial factors—health, safety, relationships, job satisfaction, income and living conditions. It guides choices about work, housing and saving by weighing present comforts against future goals. Key takeaways Quality of life is…

Quality Management Quality management is the systematic oversight of all activities and tasks required to maintain a desired level of excellence in products, services, and processes. It combines policy, planning, assurance, control, and continuous improvement to meet customer expectations and long-term business objectives. When applied across an entire organization, it is commonly called total quality…

What is a Quality Control Chart? A quality control (QC) chart is a graphical tool used to determine whether a manufacturing process or product attribute is staying within intended specifications. It plots measured values from random samples over time so you can quickly see whether variation is normal (random) or indicates a systematic problem that…

Quality Control: What It Is, How It Works, and Career Paths Key takeaways * Quality control (QC) is the set of processes used to ensure products and services meet defined quality and safety standards. * QC involves testing, inspection, and corrective action at multiple stages of production or service delivery. * Methods range from statistical…

Qualitative Analysis Qualitative analysis examines nonnumerical, “soft” factors to understand an organization’s value, prospects, or behavior. It complements quantitative analysis by addressing intangible elements—management quality, company culture, customer experience, competitive advantage—that numbers alone cannot capture. What qualitative analysis is Focuses on subjective judgment and contextual understanding rather than statistical measurement. Investigates intangible factors such as…

Qualifying Widow(er): Definition and Overview A qualifying widow or widower is a federal tax filing status that lets a surviving spouse retain the tax treatment of a married couple filing jointly for up to two years after the year of the spouse’s death. This provides the surviving spouse the married filing jointly standard deduction and…

Qualifying Transaction: How It Works and Why Companies Use It Key points * A qualifying transaction is the primary route for a private company in Canada to become a publicly listed company on the TSX Venture Exchange (TSXV). * It is executed by a capital pool company (CPC)—a listed shell that raises seed capital and…