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Institutional Brokers’ Estimate System (IBES) Key takeaways IBES (I/B/E/S) is a centralized database of sell‑side analyst estimates and company guidance for thousands of public companies. It aggregates forecasts for earnings, revenue, price targets, and other financial metrics, with historical coverage back to 1976 (international data from 1987). The database supports investment decision‑making, forecasting, and academic…

Institute of Management Accountants (IMA) The Institute of Management Accountants (IMA) is a global association for management accounting and finance professionals. It promotes education, ethics, research, and professional development, and is best known for the Certified Management Accountant (CMA) credential. What the IMA does Certifies and supports finance professionals through the CMA designation. Promotes high…

Institute for Supply Management (ISM): Overview What is ISM? The Institute for Supply Management (ISM) is a nonprofit professional association serving supply management and purchasing professionals. Founded in 1915 as the National Association of Purchasing Agents and renamed ISM in 2002, it is the largest organization of its kind and supports members worldwide with education,…

Installment Debt An installment debt is a loan repaid in regular, scheduled payments that cover both interest and a portion of the principal. Most mortgages, auto loans, and many personal loans are installment loans. They are amortized, meaning the lender creates an amortization schedule that shows each payment’s split between interest and principal over the…

Insolvency: Definition, Causes, and What to Do Key takeaways * Insolvency is the inability of an individual or business to pay debts as they come due or to cover liabilities with assets. * Two common measures are cash-flow insolvency (liquidity shortfall) and balance-sheet insolvency (liabilities exceed assets). * Insolvency does not automatically mean bankruptcy; it…

Insider Trading: What It Is, When It’s Legal, and When It’s Not Key takeaways * Insider trading is buying or selling a company’s securities based on material, nonpublic information. * “Material” means information a reasonable investor would consider important to a buy/sell decision; “nonpublic” means it has not been broadly disclosed. * Some insider transactions…

Insider Information: Definition, Importance, and Legal Framework What is insider information? Insider information is material, non-public information about a publicly traded company that could influence an investor’s decision to buy or sell the company’s securities. Examples include a pending merger, a major product recall, unexpected earnings shortfalls, or an imminent financial scandal. Why it matters…

Inside Sales: Definition, How It Works, and Advantages What is inside sales? Inside sales is the practice of selling products or services remotely—using phone, email, video, and online channels—rather than meeting customers face-to-face. Inside sales teams usually operate from offices, call centers, or remotely from home. The model is common in both business-to-business (B2B) and…

Inside Indemnity What is indemnity? Indemnity is a contractual commitment by one party to compensate another for loss, damage, or liability. Common in insurance and commercial contracts, indemnity can mean: * Payment for losses (cash) Repair or replacement of damaged property Exemption from liability in certain legal contexts How indemnity works in contracts Indemnity clauses…

Inside Day: Definition and Use in Trading An inside day is a two-day price pattern in which the second day’s high is lower than the first day’s high and the second day’s low is higher than the first day’s low — in other words, the second day’s trading range is completely inside the prior day’s…

INSEAD INSEAD is a leading global graduate business school with campuses and centres across Europe, Asia, the Middle East and North America. Founded as the Institut Européen d’Administration des Affaires, it is known for its intensive programs, multinational student body and strong executive education offerings. At a glance Global presence: campuses in Fontainebleau (France), Singapore…

Input-Output Analysis Input-output (I‑O) analysis is a method for mapping and measuring the interdependencies among industries in an economy. It examines how inputs (raw materials, intermediate goods, labor) flow into production and how outputs from one sector become inputs for others. Developed by Wassily Leontief (Nobel laureate), I‑O analysis is widely used to estimate how…

Inorganic Growth Inorganic growth is expansion achieved by acquiring or combining with other businesses or by opening new branches or locations—rather than by expanding a company’s own operations. It typically delivers faster increases in market share, revenue, or capabilities than organic growth, but often carries higher costs and integration challenges. How inorganic growth is achieved…

Initial Public Offerings (IPOs) An initial public offering (IPO) is the first time a private company sells shares to the public and lists them on a stock exchange. IPOs convert private ownership into public equity, raising capital for the company and providing liquidity for founders, employees and early investors. Key points IPOs raise growth capital,…

Initial Margin Explained: What It Is, How It Works, and Examples Definition Initial margin is the cash or collateral an investor must deposit to open a leveraged position using a margin account or futures contract. In U.S. equity trading, Regulation T (Reg T) sets a minimum initial margin of 50% for purchases on margin, meaning…

Initial Coin Offering (ICO): What It Is and How to Evaluate One Key takeaways * An Initial Coin Offering (ICO) is a fundraising method where a project issues digital tokens to investors to finance a blockchain or crypto product—similar in purpose to an IPO but generally less regulated. * ICOs vary by token supply and…

Inherited IRA An inherited IRA (also called a beneficiary IRA) is an individual retirement account established for someone who inherits IRA assets after the original account owner dies. Rules for inherited IRAs depend on the beneficiary’s relationship to the decedent, the type of IRA (traditional vs. Roth), and the date of death relative to the…

Inheritance Tax: What It Is, How It Works, and Who Pays It What is an inheritance tax? An inheritance tax is a state-level tax on the value of assets received by a beneficiary after someone dies. Unlike an estate tax (which is levied on the deceased person’s estate before distribution), an inheritance tax is assessed…

What Is an Inheritance? An inheritance is the property, money, or other assets that a person leaves to others after they die. Recipients may receive assets as heirs (by intestacy laws) or as beneficiaries named in a will, retirement plan, or life insurance policy. Inheritances can include cash, investments, real estate, vehicles, jewelry, art, and…

Inherent risk Inherent risk is the natural susceptibility of a financial statement item to a material misstatement, before considering any internal controls. It reflects the likelihood that errors or omissions will occur because of the nature of transactions, the judgment required in accounting estimates, or the complexity of the reporting environment. Key points Inherent risk…

Infrastructure: Definition, Types, and Importance What is infrastructure? Infrastructure refers to the basic physical systems and institutions that enable a community, region, or nation to function. It includes tangible assets such as roads, bridges, water systems, power grids, and broadband networks, as well as institutional and service systems—schools, hospitals, courts, and financial and public-safety institutions—that…

Information Ratio (IR) What it is The information ratio (IR) measures how much a portfolio or fund outperforms a chosen benchmark, relative to the consistency of that outperformance. It answers two questions: Did the manager beat the benchmark, and were those excess returns consistent? Key takeaways A higher IR indicates more consistent excess returns relative…

Understanding the Information Coefficient (IC): Definition, Formula, and Example Key takeaways The information coefficient (IC) quantifies how closely an analyst’s or manager’s forecasts match actual outcomes, typically stock returns. IC ranges from −1.0 (perfectly wrong) to +1.0 (perfectly correct); 0 indicates no predictive value beyond chance. IC evaluates forecasting skill; it is distinct from the…

Inflection Point in Business: Overview and Examples Definition An inflection point is a significant event that changes the trajectory of a company, industry, sector, economy, or geopolitical situation. It marks a turning point after which dramatic change—positive or negative—is expected, often forcing fundamental adjustments to survive or capitalize on new conditions. Key takeaways Inflection points…

Inflationary Gap An inflationary gap occurs when an economy’s actual (real) GDP exceeds its potential (full‑employment) GDP. In this situation, aggregate demand outpaces the economy’s capacity to produce goods and services, putting upward pressure on prices. Key takeaways An inflationary gap exists when Actual (Real) GDP > Potential (Full‑Employment) GDP. It results from demand exceeding…

Inflation Swaps Definition An inflation swap is a bilateral contract in which one party exchanges fixed cash flows for payments linked to an inflation index (commonly the Consumer Price Index, CPI). It transfers inflation risk: one side pays a fixed rate, while the other pays a floating rate tied to realized inflation. The notional principal…

Inflation Hedge Definition An inflation hedge is an investment added to a portfolio to offset the decline in a currency’s purchasing power caused by rising prices. The goal is to hold assets that are expected to maintain or increase in value when inflation erodes cash and fixed-income returns. How it works Inflation reduces real returns:…

Inflation-Adjusted Return What it is The inflation-adjusted return (also called the real rate of return) measures an investment’s performance after removing the effect of inflation. It shows the change in purchasing power produced by an investment, rather than the nominal dollar gain. Key takeaways Real return = the nominal return adjusted for inflation; it shows…

Inflation Accounting Inflation accounting (also called price-level accounting) adjusts financial statements to reflect changes in the general price level. It aims to present a truer picture of a company’s financial position and performance when historical cost figures are distorted by significant inflation or deflation. Why it matters Historical monetary amounts can lose relevance in inflationary…

Inflation: What It Is, What Causes It, and How to Respond Key takeaways * Inflation is a sustained rise in the general price level that reduces purchasing power. * Main causes: demand-pull, cost-push, and built-in (wage-price spiral) inflation. * Common measures: Consumer Price Index (CPI) and Producer/Wholesale Price Index (PPI/WPI). * Policymakers use monetary policy…

Inferior Goods Definition An inferior good is a product for which demand falls as consumers’ incomes rise. In economic terms, inferior goods have a negative income elasticity of demand: when people earn more, they buy less of these goods and switch to costlier substitutes. Key points Inferior goods become more attractive during income declines or…

Infant-Industry Theory Key takeaways * The infant-industry theory argues that new domestic industries may need temporary protection from international competition to develop economies of scale and become competitive. * Early proponents include Alexander Hamilton and Friedrich List; later refinements came from John Stuart Mill and economists who added cost–benefit conditions for protection. * Typical policy…

What Is an Inefficient Market? An inefficient market is one where asset prices do not fully reflect their true value. Prices can deviate from fundamental worth because available information is not instantaneously or uniformly incorporated. These gaps create opportunities for some participants to earn excess returns and can lead to deadweight losses or, in extreme…

Industry Life Cycle Analysis Industry life cycle analysis examines the stage an industry occupies at a given time to inform forecasts of revenue, profit trends, and company valuations. It complements company-level fundamental analysis by placing firms within the broader evolution of their industry. The four stages Industry life cycles typically follow four stages—Expansion, Peak, Contraction,…

Industry Life Cycle The industry life cycle describes how an industry evolves through four stages: introduction, growth, maturity, and decline. Each stage has characteristic market dynamics, competitive behavior, and strategic priorities. Recognizing which stage an industry occupies helps companies and investors make better operational and financial decisions. Key takeaways Four stages: introduction, growth, maturity, decline….