Terms Beginning With 'f'

Four Asian Tigers

Four Asian Tigers collectively refer to four countries, which were at the heart of growth in Emerging Markets after the Second World War up until the recession in the early 1990s, which also accompanied the fallout of Japan.

This quad includes South Korea, Singapore, Hong Kong and Taiwan. Since the 1960s, the quad maintained steady economic growth, which has paid dividends today. Tiger Economy is referred to a rapid economic growth accompanied by improvement in standard of living.

Four Asian Tigers grew rapidly and fast and are now developed economies with relatively better educated and productive work force compared to other countries in the region. By the dawn of this century, these countries had completely developed their competitive advantages.

Singapore and Hong Kong emerged as international financial centres, and electronic manufacturing boomed in South Korea and Taiwan. The development in the quad was also propelled by emerging technologies and globalisation.

Even after the widespread slowdown in the early 1990s, the quad continued to grow after a severe crisis in 1997, which hit the currencies of the majority of Asian countries. But by now, China had emerged as a new star led by similar export and manufacturing policies.

Plagued by wars and education problems, the region was labour intensive and largely tilted towards agriculture. After the 1960s, these nations started emerging as highly educated, technologically-advanced with an improving standard of living.

Continued momentum in growth also allowed to grow relatively faster than the world had seen before. Often referred to as the Asian Miracle, manufacturing and industrialisation of Asian Tigers also helped the world with growing need of technology and equipment.

Export and manufacturing were also at the heart of growth in Japan as well as China. But no one would have predicted Four Asian Tigers will be developed in half-a-century. A free-market approach to development also helped these countries.

South Korea

South Korea was independent after Japan was defeated in 1945 but was under US military occupation. Korean War also destroyed the Korean Peninsula, and South Korea became independent afterwards.

In the initial years of recovery, the country was aided by the US, and economic growth was also dependent on the US economy. Syngman Rhee, President of South Korea, was able to develop educational, infrastructure and communication systems with the help of US aid. After Park Chung-hee came into power in 1962, the country embarked on five-year plans.

Now South Korea was targeting economic growth, trade balance, investments, industries as a part of Five-Year Plans. It also increased State intervention in the industries that were crucial for its labour-intensive export-driven ambitions.

Industries were also reinvesting their profits in advanced technologies and machinery, and the Government was using tariffs and subsidies to keep the growing industries protected from international pressure.

The second five-year plan emphasised on the development of heavy industries, which helped to achieve more exports. In the 1990s, the country pushed itself into high tech industries, and exports were from industries also helped further.

Taiwan

Taiwan has had an established export business in agricultural goods and textiles. Initially, the country focused on import-substituting industrialisation, which didn’t bear reasonable fruits, and shifted to export-oriented industrialisation on similar lines to South Korea.

Industrialisation took over in the country, and traditional primary sector like agriculture and fishery dropped and manufacturing output from industries rose significantly. Taiwan also emphasised on heavy-industries like petrochemical, steel and electronics.

The country also privatised state-owned firms and promoted foreign investment and strategic expertise. Leaders also acknowledged the important mid-size firms in economic development. They were also controlling foreign exchange, promoting demand for domestic good by limiting imports by private companies.

In the 1970s, the labour-intensive economy of Taiwan was under pressure by economic opening in China. In the wake of growing competition, the country decided to undertake transition to technology and skill-intensive economy.

Singapore

After the independence from Malaysia, the country was left with small land and no means to supply sufficient food for its people. This also stemmed the belief of having industries to maintain the trade balance.

Singapore development is credited to the leadership of Lee Kuan Yew, who was the first Prime Minister for over three decades. He continued serving in the Government in some capacities until 2011.

In the initial years, the country moved with light industries to achieve exports, which drove the growth in the early decades of independence. But the emergence of China as an open economy also posed a threat to Singapore in the 1970s.

But during the 70s and 80s, Singapore also prioritised heavy industries. The incorporation of Central Provident Fund provided investments in industries, communications, infrastructure, and housing. And, the Government also increased the minimum wage.

Singapore found its prosperity as a financial and trading hub, which also require high-skills like high tech industries in South Korea and Taiwan. The country also embraced liberalisation, which also allowed it emerge as a financial and trading hub.

Hong Kong

Hong Kong had been long known for its ports and as a trading hub in Asia. The Government in Hong Kong emphasised on the development of infrastructure for heavy industries. Given its strong roots as a trading hub and proximity to China, it developed as a financial and trading hub as well as industrial producer.

Given China’s takeover of Hong Kong, the picture of the region is not as similar as it was before. Hong Kong had emerged as an Asian Tiger with the most free-market attributes compared to other Tigers.

Hong Kong was also benefitted by favourable tax incentives and cheap labour, which attracted a number of industries. Infrastructure push had been at the heart of development in Hong Kong.

 

 

 

What is the Dark Web?  The dark web is one such portion of the World Wide Web which is not accessible by regular search engines. The dark web is considered a hotbed for criminal activities, and it is much more than that. Various websites exist on an encrypted network inside the dark web. Standard web browsers and programs cannot find these websites. Once inside the dark web, different sites and pages can be accessed like one does on the web. Scientists believe that the internet we see is only 4% of the entire ocean of the web, meaning the 96% consists of the "Deep and Dark Web".  The user interface used in the dark web is usually internet-based, but it utilises special software which is not part of the standard ones. There are dozens of web browsers to surf the internet, but they all work in the same way. These standard browsers use ports and protocols to request, transfer and view data on the Internet. The website you access may look familiar, but as you enter, it may be illegal or something familiar but otherwise not monitored by anyone else. Therefore, the deep web and the dark web are famous for being anonymous. Also read: Cyber Espionage Campaign: Strings that tie China, Australia and the US How to access dark web browser? In order to access a few areas which are restricted, the user may need a password and a process to follow. A special software called TOR (The Onion Router) or the Freenet has these non-standard connections. These browsers are unlike standard internet browsers and have a process to access. They allow the users to browse around the dark web and are focused on keeping the user identity anonymous. If hacked or accessed, the regular web browser can easily provide user information such as who the user is and whereabouts. Though the dark web is providing 100% anonymity, federal agencies have been successful in tracking down criminal activities on the dark web. It is often said that the person you are talking to on the dark web could either be an FBI agent or a criminal. Image: Kalkine   What happens inside the world of the dark web?  The dark web is famous for allowing sinister activities, but many users go on the dark web to access information which otherwise may not be accessible on standard internet. Such as users from extremely oppressive governments who cut access to the world for their citizens. Unfortunately, such confidential environments also provide open platforms to criminals, terrorists and other such individuals involved in illegal activities.   Hence, experts advise users to not access the dark web even out of curiosity as it is a lawless environment. There have been many incidents where innocent, curious users were trapped and forced to get involved in criminal activities or their digital devices hacked and compromised without their knowledge.  A study conducted by a University of Surrey researcher Dr Michael McGuires in 2019, Into the Web of Profit, shows that the dark web has become worse in recent times. Since 2016 of all the listings on the dark web suggested, 60% could harm companies. Everything illegal and criminal can be found on the dark web, it also has other legitimate options such as chess clubs or book clubs, but because of the anonymity, the user will not know whom he/she is interacting with. Inside the dark web, anonymity and lawless nature make the crimes which exist otherwise in our society hard to trace.  The payment procedure inside the dark web is also different from the World Wide Web. Most often, Bitcoin and Monero cryptocurrency are used for the transactions.    RELATED READ: Knock Knock! Cybercriminal at Your Doorstep   What’s the difference between the deep web and dark web? The dark web is part of the entire deep web and is hidden from regular browsing access. Most people confuse the deep web and the dark web as one entity. It is not. The deep web content includes anything hidden and restricted behind the security wall such as content which otherwise requires paywall or sign-in or blocked by the author. Content which cannot be easily accessible on regular internet such as medical records, membership websites, paid content are available on the deep web; hence it is also called Invisible Web.  No one really knows the total size of the internet, but the experts believe that the standard World Wide Web consists of only 4% internet, the deep web consists of 90% and dark web consists of 6% of the entire internet.  ALSO READ: Technology has changed the way we work amid the COVID-19 crisis: A look at in-demand technologies Image: Kalkine     Also read: It happens again, NZX being bullied by Cyber-attackers- Down for the fourth day   What kind of risk companies face due to the dark web?  The Into the Web of Profit report listed below threats various organisations around the world are facing, especially the ones who have weak or insufficient cybersecurity measures.   Malware attacks Distributed denial of service (DDoS) attacks Botnets Trojan, keyloggers, exploits  Espionage  Credentials access  Phishing  Refunds Customer data Operational data Financial data Intellectual property/ trade secrets    Also read: Cybersecurity and the Requirement of a Resilient Environment in Australia  Are there advantages and disadvantages to the dark web?  The dark web provides complete anonymity, the users get complete privacy to perform any activity, be it illegal or legal. Many countries in the world still have authoritarian regimes offering no civil rights to their people. To such oppressed lot, the dark web provides an opportunity to access news, information, data and also express their views. The dark web is also a perfect place for law agencies to map criminal activities while being undercover. It is also easy to commit gruesome crimes through the dark web as it is complicated and lawless. Criminals can easily use the dark web to compromise someone's privacy, steal data or private information or even hire someone to commit murder.  Do internet users need to be concerned about the dark web?  The simple answer is no unless the user is using the dark web. Study says that most young people visit the dark web out of curiosity. They do not want to indulge in any criminal activity but want to see how the hidden and secret world of the dark web operates. And that is where the possibility of the electronic device IP address getting hacked by other criminals to perform their criminal activities lies.  The earliest use of darknet dates back to the year 2000. Freenet was created at the University of Edinburgh based on a student research paper. Ian Clark wrote the paper in 1999 on the possibility of such an encrypted internet base. Freenet was created to oppose censorship and provide a platform for free speech. The most powerful dark web is TOR, and it was created by the United States government to have a secure encrypted communication in case of emergency and complete disaster. Even today, many law agencies are secretly active inside the world of the dark web to gain access in the criminal world and stay one step ahead.

What is data warehousing? Data warehousing is defined as the method of gathering & handling data from different sources to get meaningful output and insights. Data warehousing is central to the BI system and is built for data analysis and reporting. Source: © nfo40555 | Megapixl.com In simple terms, a data warehouse is a large collection of data utilized by businesses to make investment decisions. What are the characteristics of data warehousing? Data warehouse has supported businesses in making informed decisions efficiently. Some of its key features are highlighted below: The data in a data warehouse is structured for easy access, and there is high-speed query performance. The end users generally look for high speed and faster response time – two features present in data warehousing. Large amount of historical data is used. Data warehouse provides a large amount of data for a particular query. The data load comprises various sources & transformations. What are the benefits of data warehousing? The Companies which used data warehousing for analytics and business intelligence found several advantages. Below are some of them: Better Data: When data sources are linked to a data warehouse, the Company can collect consistent and relevant data from the source. Also, the user would not have to worry about the consistency and accessibility of the data. Thus, it ensures data quality and integrity for sound decision making. Faster  decisions: Through data warehousing, it is possible to make quicker decisions as the data available is in a consistent format. It offers analytical power and a comprehensive dataset to base decisions on tough truths. Thus, the people involved in decision making do not have to rely on hunches, incomplete data, and poor quality data. It also reduces the risk of delivering slow and inaccurate data. How does a data warehouse work? A data warehouse is like a central repository where the data comes from various sources. The data streams into the data warehouse from the transactional system and other relational databases. These data could either be structured, semi-structured or unstructured. These data get processed, altered, and consumed in a way that the end-user can gain access to the processed data in the data warehouse via business intelligence (BI) devices, SQL clients and spreadsheets. A data warehouse merges the data that comes from various sources into a complete database. The biggest advantage of this merged data is that the Company can analyze the data more holistically. It also makes the process of data mining smooth. Copyright © 2021 Kalkine Media Pty Ltd. Component of a data warehouse A data warehouse can be divided into four components. These are: Load Manager Load Manager, also known as the front component, does operations related to the mining and loading the data into a data warehouse. Load manager transforms the data for entering into Data warehouse. Warehouse Manager The warehouse manager manages the data within the data warehouse. It analyses data to confirm that the data in the data warehouse is steady. It also conducts operations such as the creation of indexes and views, generation of denormalization and aggregations, modifying and integrating the source data. Query Manager Query Manager is a backend component that does operations concerning the supervision of user queries. End-User access tools End-User access tools comprise data reporting, query tools, application development tools, EIS tools, data mining tools, and OLAP tools. Roles of Data Warehouse Tools and Utilities The tools and utilities in a data warehouse are used for: Data extraction: The data extraction process involves gathering data from heterogeneous sources. Data cleaning: Data cleaning consists of searching for any error in the data. Data transformation: Data transformation process involves changing the data into a data warehouse setup. Data loading: This process involves data sorting, recapping, consolidating, verifying integrity. Refreshing: This process requires revising data sources to the warehouse. Application of data warehouse Data warehouse plays a considerable role across multiple sectors. Some of the sectors it caters to are highlighted below. Aviation sector In the aviation sector, a data warehouse’s role can be seen in crew assignment, route profitability analysis, any promotional activity. Banking Industry In the banking sector, the focus is on risk management, policy reversal, customer data analysis, market trends, government rules and regulations and making financial decision. Through a data warehouse, banks can manage the resources available on the deck effectively. Banks also take the help of a data warehouse to do market research, analyze the products they offer, develop marketing programs. Retail industry Retailers act as an intermediary between the producers and the customers. Hence, these retailers use a data warehouse to maintain the records of both producers as well as the customer to maintain their existence in the market. Data warehouses help track inventory, advertisement promotions, tracking customer buying trends and many more. Healthcare industry In the healthcare industry, a data warehouse is used to predict the outcome of any test and taking relevant action accordingly. Data warehouses help them to generate patient treatment report, offer medical services, track the medicine inventory. Many patients visiting hospital have health insurance. Through a data warehouse, hospitals maintain the list of insurance providers. Investment and insurance sector In the insurance and investment sector, the role of data warehouse becomes important in tracking the data pattern, customer trend and market movement.      Services sector In the services sector, a data warehouse is used for maintaining financial records, studying the revenue pattern, customer profiling, resource management and human resource management. Telecom The telecom sector uses a data warehouse in the promotion of its offerings, making sales decision, distribution decision, features to include in case they decide to launch a new product based on the customer requirement.   Hospitality The hospitality sector involves hotel and restaurant services, car rental services etc. In this sector, the companies use a data warehouse to study the customer feedback on the various services offered and accordingly design and evaluate their advertising and promotion campaigns.

What is earnest money? Earnest money refers to a sum of money that is paid by the buyer to the seller as a form of reassurance of future payments during the sale of a house. Paying earnest money is also beneficial to the buyer because it gives him leverage to arrange the remaining funds. Earnest money can be deposited via a direct home deposit, an escrow account or in the form of good faith money. How does earnest money work? Earnest money is paid before closing on a house sale. When the seller and buyer come to an agreement on the house sale, the seller must take the house off the market. Earnest money serves the purpose of assuring the seller that the deal would not fall through. The amount paid as earnest money is usually 1-3% of the total sale value of the house. Most sellers prefer to hold earnest money in an escrow account. In case the deal does not materialize, the money can be given back to the buyer directly from the escrow account. This removes the concerns any buyer may have about whether the money would be returned by the seller or not. In case the buyer and seller go ahead with the sale, the earnest money becomes a part of the down payment. Thus, the buyer would only pay the remaining amount of the down payment. However, in case the agreement does not materialize between the buyer and the seller, the earnest money is returned to the buyer after deducting the escrow fees from it. With money locked in on one house, buyers are less likely to close a deal with any other house seller. How is the amount of earnest money decided upon? The percentage of the total amount that can be taken as earnest money varies from state to state as policies are different. Additionally, the market scenario is also a major factor affecting the amount of earnest money to be paid. Under normal conditions, 1-2% of the total sale value can be taken as earnest money. However, if the market does not have a high demand for houses, then the percentage charged as earnest money could be lower around 1%. In markets with high demand, this percentage could be as high as 3%, or even 5%. To outbid other buyers, one can pay a larger sum of money as earnest money. This would increase the buyer’s chances of securing the property. Why is earnest money important? Earnest money may not always be mandated by the seller, but in a highly competitive market earnest money may be necessarily required. Paying the earnest money makes the agreement official. Without earnest money, the deal may not be considered official in many regions. It is one of the four stages of payment while making a deal on a house. However, in certain instances, even after the payment of the earnest money, the deal may not materialize. Typically, a buying agent should be able to assist the buyer in such a case. What conditions must be met for earnest money to be refundable? Earnest money has certain contingencies attached to it for the protection of both the seller and the buyer. Even after the seller has accepted the earnest money deposit, there are certain contingencies that must be met before the deal can be finalized. These include the following: Home inspection contingency: This contingency is placed so that buyers can back out of the agreement in case the there are some faults in the property, and it is in need of repair. However, it is not necessary for the buyer to call off the deal in such a case. He can simply work with the seller to reach a mutual decision rather than scraping away the deal completely. Financing Contingency: It might be the case that a buyer had not been approved for a mortgage before making the earnest deposit. Here the financing contingency would protect the buyer. If the mortgage does not get approved even though the earnest money had been paid, then the financing contingency allows the buyer to walk away from the deal along with the refunded earnest money. Appraisal Contingency: This protects the buyer in case the property has been overvalued. Here the lender can hire a third-party investigator who can examine whether the property has been priced at a fair value or not. If the value of the house comes out to be higher than the fair value, then the buyer can walk away with a refund. Additionally, this contingency can be used to bring down the price of the sale too. Contingency for Selling the Existing home: It is quite possible that contracts are made based on whether the buyer can sell an existing home or not. If the buyer is unable to sell the existing home, then he can walk away with a refund. These contingencies can be waived by the buyer in case he is sure that the deal would close and there would be no backing off. However, it is important to note that contingencies can provide an extra cushion against adverse circumstances and they might come in handy in certain cases. What is the difference between earnest money and good faith deposit? Both terms can be used interchangeably. However, all good faith deposits are not the same as earnest money. A good faith deposit can be made directly to the mortgage lender, while earnest money is usually held in an escrow account. Both serve the purpose if providing a sense of security about the buyer sticking to the same deal and not going elsewhere. The good faith deposit eventually forms a part of the lending process. However, in case the deal does not materialize, it is possible that the borrower would not get his good faith deposit back.

What is EBITDA? Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) is a widely used financial metric in evaluating cash flows and profitability of a business. Market participants closely track EBITDA and apply it in decision making extensively. Although conventional investors like Charlie Munger had raised concerns over the use of EBITDA, it is very popular in markets, and M&A transactions are mostly priced on EBITDA-based valuation like EV/EBITDA (x). EBITDA is not recognised by IFRS and GAAP but is used extensively in the Corporate Finance world. It is now a mainstream financial metric that companies look to target. EBITDA depicts operational cash generation capacity of a firm in a given period. It acts as an alternative to financial metrics like revenue, profit or earnings per share. EBITDA allows to evaluate a business operationally and outcomes of operating decisions. Non-operating items are excluded to arrive at EBITDA. EBITDA excludes the impact of capital structure or debt/equity, and non-cash expenses like depreciation and amortisation. A particular criticism of EBITDA has been the inappropriate outlook of capital intensive businesses, which incur large depreciation expenses. Business with large assets incurs substantial costs related to repair and maintenance, which are not captured in EBITDA because depreciation expenses are accounted to calculate EBITDA. Meanwhile, EBITDA can paint an appropriate picture for asset-light business with lower capital intensity. While revenue, profit and earning per share remain sought-after headline generators for corporates, EBITDA has also found its growing application in the corporate finance world and is now a mainstream metric to evaluate a business financially. Perhaps the growth of asset-light business models has also added to the use of EBITDA. Its debt-agnostic approach to evaluate businesses has given reasons to investors, especially for high growth firms during capital expenditure cycles. But EBITDA has been present for close to four decades now. In the 1980s, the growth in corporate takeovers through leverage buyout transaction was on a boom. EBITDA grew popular to value heavy industries like broadcasting, telecommunication, utilities. John Malone is credited for coining this term. He was working at TCI- a cable TV provider. Since EBITDA has remained an important metric to determine purchase price multiples and is highly used in M&A transactions. EBITDA’s application in large businesses with capital intensive assets that are written down over a long period has been a source of concern for many investors. Although EBITDA is an effective metric to evaluate the profitability of a firm, it does not reflect actual cash flow picture of a firm during a period. Also, it does not account for capital expenditures of the firm, which are crucial in successfully running a business. EBITDA does not give a fair cash flow position because it leaves out crucial items like working capital, debt and interest repayments, fixed expenses, capital expenditure. At the outset, there can be times when EBITDA may overstate performance, value and ability to repay debt. How to calculate EBITDA? NPAT: Net Profit after tax is the amount reported by a firm in the given period. It is present on the income statement of the firm and is used in the calculation of earnings per share of an entity. To calculate EBITDA, interest expense, tax, depreciation and amortisation are added to NPAT. Interest Expense: Firms can employ debt in their capital structure, and interest expense is funds paid to lenders as interest costs on principal debt. Most companies have different financing structure, and excluding interest payments enable comparing firms on operating grounds through EBITDA. Tax: Firms also pay income tax on profits. Excluding taxes gives a fair picture of the operating performance of the business since tax vary across jurisdictions, and sometimes according to size of business as well. Depreciation: Depreciation is the non-cash expense to account for the steady reduction in value of tangible assets. Firms can incur depreciation expense on machinery, vehicles, office assets, equipment etc.  Amortisation: Amortisation is the non-cash expense to account for the reduction in the value of intangible assets like patents, copyrights, export license, import license etc. Operating Profit: Operating profit is the core profit of a firm generated out of operations. It includes cash and non-cash expenses of a firm, excluding income tax and interest expenses. Operating Profit is also called Earnings Before Interest and Tax (EBIT). Read: EBIT vs EBITDA What is TTM EBITDA and NTM EBITDA? Trailing Twelve Months (TTM) or Last Twelve Months (LTM) EBITDA represents the EBITDA of the past twelve months of the firm. It allows to review the last operation performance of the business. Whereas NTM EBITDA represents 12-month forward forecast EBITDA of the firm. NTM EBITDA is also one-year forward EBITDA. Market participants are provided with consensus analysts’ estimates for a firm, which also include NTM EBITDA, NTM EPS, NTM Net Income or NPAT. What is EBITDA margin? EBITDA margin is the percentage proportion of a firm EBITDA against total revenue. It indicates the operational profitability of the firm and cash flows to some extent. If a firm has a higher margin, it means the level of EBITDA against revenue is higher. It is widely used in comparing similar companies and enable to evaluate businesses relatively. If a firm has a total revenue of $1 million and EBITDA is $800k, the EBITDA margin is 80%. What is adjusted EBITDA? Adjusted EBITDA is calculated to provide a fair view business after adding back non-cash items, one-time expenses, unrealised gains and losses, share-based payments, goodwill impairments, asset write-downs etc.

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