Due diligence refers to any in-depth investigation, review, or effort to comply with requirements, expectations, or requests. The phrase originated in U.S. securities law. The laws require companies and the accountants, lawyers, and bankers who assist in the process issuing securities to provide accurate information about the securities.

Downsizing is the reduction of staffing levels necessitated by business reasons such as low sales or low profits. The number of employees required to build products is a variable expense directly related to the number of units being built. So if fewer people are on the company’s payroll, labor expense is reduced, resulting in stabilized or increased profits.

Dow Jones averages are the most widely quoted INDICATORS of the U.S. STOCK MARKET. There are three Dow Jones averages: industrials, transportation, and utilities. The Dow Jones Industrial Average (DJIA) is the oldest and bestknown indicator.

See FINANCIAL ACCOUNTING.

Dot-coms are businesses that operate primarily or solely on the INTERNET. The term dot-com comes from the suffix for business domain names (.com). Dot-coms compete with traditional store-based businesses (called “bricks and mortar”), providing alternatives to consumer and business markets.

A document-retention policy is a firm’s written policies regarding which documents to retain and where and how to retain them. Document-retention policies serve a number of purposes, including maintaining whatever is needed to conduct business, what is needed for legal and regulatory purposes, and what is needed in case of litigation.

Dividends are a distribution of a corporation’s earnings to its stockholders. A CORPORATION can do two things with its earnings: Pay them out in the form of dividends or retain them. Most corporations choose some combination—that is, they pay out a portion of earnings as dividends and retain the rest.

See CORPORATE DIVESTITURE.

Diversification has two very different meanings depending on the business context. In personal finance, diversification is investing in a variety of assets. Diversification reduces risk. If one or a few companies go bankrupt, the investor does not lose all his or her assets.

Distribution channels, also called marketing channels, are the systems used to move PRODUCTs and SERVICES from producers to consumers. At first glance, distribution seems like a simple and obvious process for a business: Find out where the customer is and get the product to him or her. But distribution channels can involve numerous structures depending on the needs of customers and producers.

There are many ways to settle business disputes. Litigation in courts is common in the United States, much less common elsewhere. Mediation and friendly consultations, which are not binding, are increasingly used and predominant in Asian countries like China.

The discount rate is the interest rate charged by the FEDERAL RESERVE SYSTEM to member banks for short-term loans. Changing the discount rate is one of three “tools” used by the Federal Reserve (known as the Fed) to manage the MONEY SUPPLY.

Discounting is the often-encountered process of finding an unknown present value from a known future value. Using a time line, discounting is moving backward in time from a given point of time in the future to the present time. Given the time value of money (that INTEREST RATES are always positive), present values are always smaller than future values.

Disclosure duties in the context of the U.S. business environment ordinarily refer to information that companies and corporate officers must disclose on a timely basis to the public. Many disclosure duties originate in U.S. securities law and cover, for example, the PROSPECTUS that any stock, bond, or security buyer must receive.

Direct marketing is MARKETING COMMUNICATIONS other than direct selling between consumers and companies. Although there is no consensus regarding what constitutes direct marketing and what is ADVERTISING, direct marketing includes catalog marketing, DIRECT MAIL, TELEMARKETING, direct-response television, and on-line retailing.

Direct mail is the use of letters, brochures, samples, postcards, catalogs, and other printed material sent by mail to potential and current customers. Direct mail is a multibillion- dollar industry in the United States.

Direct INVESTMENT has two meanings in business: the creation of a business enterprise in another country or direct transfer savings from households to businesses without the use of FINANCIAL INTERMEDIARIES.

See EMERGING MARKETS.

In their basic form, derivative securities are agreements between two or more parties. The parties agree to pay each other based on some agreed benchmark. For example, two businesses agree to pay each other based on the behavior of INTEREST RATES.

Deregulation is the reduction of government rules regulating business activities; it is a response to previous government decisions to regulate certain industries in the economy.

Depreciation, depletion, and AMORTIZATION are accounting techniques associated with the long-term ASSETS of a firm. When a long-term asset that is used in the course of business helps to generate revenue, a portion of its purchase cost is systematically apportioned to expense to satisfy accounting’s matching principle.

Dependency ratios are statistics estimating the number of people in various dependent groups per 1,000 workingage adults. Dependency ratios are used by demographers to predict changing relationships and social patterns. The two most common are the youth-dependency and elderlydependency ratios.

The U.S. Department of the Treasury is the major financial management department for the federal government.

The U.S. Department of Transportation (DOT) is a federal agency responsible for national transportation policy. The DOT, established in 1966, oversees numerous federal regulatory programs ranging from intermodal transportation to the St. Lawrence Seaway.