Remove articles barriers-to-entry
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Barriers to entry definition

Accounting Tools

Related Courses Business Strategy Managerial Economics What are Barriers to Entry? Barriers to entry are restrictions that apply to new competitors in a marketplace. There are many possible barriers to entry that may apply to a marketplace, including those noted below.

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Financial leverage definition

Accounting Tools

Consistent cash flows are more common in industries where there is a reduced level of competition, barriers to entry are high, and there is little disruption due to product innovation. Financial leverage is the use of debt to buy more assets. Leverage is employed to increase the return on equity.

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Oligopoly definition

Accounting Tools

This situation arises when there are strong barriers to entry , such as government regulation or a large capital expenditure requirement. Examples of an Oligopoly An example of an oligopoly is the airline industry, for which the main restriction on entry to the market is a limited number of gates at airports.

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Predatory pricing definition

Accounting Tools

Predatory pricing can act as a strong barrier to entry , since potential competitors will steer clear of any company sending such a strong competitive signal. What is a Predatory Price? A predatory price exists when the price is lower than the incremental marginal cost of manufacturing a product. Who Uses Predatory Pricing?

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Price war definition

Accounting Tools

This is especially common when there are few barriers to entry. Related AccountingTools Courses Revenue Management Revenue Recognition Related Articles Price Setter Price Taker A price war is a situation in which competitors attempt to take market share from each other by reducing their prices.

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Leverage ratios

Accounting Tools

For example, if an industry has few competitors, there are high barriers to entry , and there is a long history of above-average profits , then an organization could probably maintain a high debt load over a long period of time. Leverage ratios are used to determine the relative level of debt load that a business has incurred.

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Market share definition

Accounting Tools

The ability of an organization to increase its market share can be severely limited by the existence of barriers to entry , or by the restrictive pricing practices of those firms already competing in the industry. Related Articles How to Calculate Market Share Market Share Variance