The preselected production volume level used to set a budgeted fixed-factory-overhead rate applying costs to inventory. Also called denominator activity or denominator level.Definition
Denominator Volume FAQs
Denominator Volume is a financial market indicator that measures the amount of volume traded for a specific security over a specific period.
Denominator Volume is commonly used as a tool to measure liquidity and gauge investor sentiment in a particular security. It can also be used to help identify potential areas of support or resistance on charts.
Factors that can influence denominator volume include news events, economic data releases, corporate announcements, and changes in the political landscape.
Denominator Volume can be used as a tool to identify potential entry and exit points. It can also help traders anticipate when a market may be overbought or oversold.
One of the main limitations of denominator volume is that it is based on past market data and therefore cannot predict future price movements with any certainty. Additionally, it may not accurately reflect actual trading activity due to factors such as discrepancies between bid-ask spreads.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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