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Home Categories Financial Analysis Working Capital Days shows how many days it takes a company to convert its working capital into income. Distribution income is a cash flow calculation for an investment vehicle such as an ETF or Real Estate Investment Trust (REIT). Dividend irrelevance theory suggests that a company’s dividend payments do not increase the value of the company’s shares. The Durbin Watson statistic is a test for autocorrelation in the output of a regression model. Earnings before interest, taxes and depreciation (EBITA) excludes due taxes, interest on a company’s debt, and the effects of amortization, which is the accounting practice of writing off the value of an intangible asset over a period of years, from the income equation. Econometrics is the use of statistical methods to develop theories or test existing hypotheses in economics or finance. The rule of thumb is that 99.7% of the data observed according to a normal distribution is within 3 standard deviations of the mean. Endogenous variables are variables in a statistical model that change or are determined by their relationship with other variables. An error term appears in a statistical model, such as a regression model, to indicate the uncertainty in the model. Ex-post means actual profit and is translated from Latin as “post factum”.