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Definition of Average
An arithmetic mean of selected stocks intended to represent the behavior of the market or some
Arithmetic mean return.
The average project earnings after taxes and depreciation divided by the average
An estimation of price that uses the average or representative price of a
The weighted-average age of all of the firm's outstanding invoices.
The average useful life of a company's collective amortizable asset base.
average number of days necessary to receive cash for the sale of
The ratio of accounts receivables to sales, or the total
The inventory cost-flow assumption that assigns the average
A firm's required payout to the bondholders and to the stockholders expressed as a
The beginning inventory for a period, plus the amount at the end of
Also referred to as the weighted-average life (WAL). The average number of years that each
The average time to maturity of securities held by a mutual fund. Changes in interest rates
Ratio of consumption to disposable income. See also marginal propensity to consume.
Ratio of saving to disposable income. See also marginal propensity to save.
The ratio of the average cash inflow to the amount invested.
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
Dow Jones Industrial Average
Index of the investment performance of a portfolio of 30 “blue-chip” stocks.
Used in charts and technical analysis, the average of security or commodity prices
A price average that is adjusted by adding other
Moving average inventory method
An inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
A financial chart that plots leading and lagging
Simple moving average
The mean, calculated at any time over a past period of fixed length.
An inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale.
A method of accounting for inventory.
Weighted average cost of capital
Expected return on a portfolio of all the firm's securities. Used as a hurdle
Weighted average cost of capital
See cost of capital.
weighted-average cost of capital
Weighted means that the proportions of
weighted average cost of capital
a composite of the cost of the various sources of funds that comprise a firm’s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value
Weighted Average Cost of Capital (WACC)
The weighted average of the costs of the capital components
weighted-average cost of capital (WACC)
Expected rate of return on a portfolio of all the firm’s securities, adjusted for tax savings due to interest payments.
Weighted Average Cost of Capital (WACC)
A weighted average of the component costs of debt, preferred shares, and common equity. Also called the composite cost of capital.
Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the
Weighted average life
Weighted average maturity
The WAM of a MBS is the weighted average of the remaining terms to maturity
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
Weighted average portfolio yield
The weighted average of the yield of all the bonds in a portfolio.
Weighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
Accounts Payable Days (A/P Days)
The number of days it would take to pay the ending balance
Accounts Receivable Days (A/R Days)
The number of days it would take to collect the ending
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
accounts receivable turnover ratio
A ratio computed by dividing annual
Arithmetic mean return
An average of the subperiod returns, calculated by summing the subperiod returns
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
Option based on the average price of the asset during the life of the option.
Bollinger band chart
A financial chart that plots actual asset data along
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
The sales level at which a company, division, or product line makes a
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
cost of capital (COC)
the weighted average cost of the
Days in receivables
average collection period.
Days' sales in inventory ratio
The average number of days' worth of sales that is held in inventory.
Days' sales outstanding
average collection period.
the rate of return used to discount future cash
When two or more averages or indices fail to show confirming trends.
Investing so that all your eggs are not in the same basket. By spreading your investments over different kinds of investments, you cushion your portfolio against sudden swings in any one area. Segregated equity funds have become a popular and secure way for average investors to get the benefits of greater diversification.
Dividends per share
Dividends paid for the past 12 months divided by the number of common shares
The weighted average of the time until maturity of each of the
Earnings per share (EPS)
EPS, as it is called, is a company's profit divided by its number of outstanding
Effective Exchange Rate
The weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country.
The weighted average of a probability distribution.
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
Geometric mean return
Also called the time weighted rate of return, a measure of the compounded rate of
Group Life Insurance
This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
This is a telephone interview of the person applying for life insurance conducted by someone from the underwriting department of the insurance company. Some insurance companies only sporadically contact applicants and some contact every applicant. On average the interview lasts between 15 to 30 minutes. The questions asked relate to personal habits (like smoking and alcohol consumption) and finances, including income and net worth, confirmation of employment, duties and the nature of the applicant's business. In addition, there are questions about driving, sports, aviation and currently held insurance. All information obtained is strictly confidential and is submitted solely to the underwriter for review.
The law of averages. The average outcome for many independent trials of an experiment
Internal rate of return
a. The average annual yield earned by an investment during the period held.
The number of days it would take to sell the ending balance in inventory at the
The ratio of annual sales to average inventory which measures the speed that inventory
The number of times a company sold out and replaced its average stock of goods in a year. The formula is:
inventory turnover ratio
The cost-of-goods-sold expense for a given
labor rate variance
the actual rate (or actual weighted average rate) paid to labor for the period minus the standard rate multiplied by all hours actually worked during the period;
Lag response of prepayments
There is typically a lag of about three months between the time the weighted
The average number of years of life remaining for a group of people of a given age and gender according to a particular mortality table.
The weighted-average term to maturity of the cash flows from the bond, where the
A widely used measure of price sensitivity to yield
management expense ratio (MER)
The total expenses expressed as an annualized percentage of daily average net assets. MER does not include brokerage fees and commissions, which are also payable by the Fund.
An investment advisory fee charged by the financial advisor to a fund based on the fund's
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
Extra average return from investing in longversus short-term Treasury securities.
a. A number that typifies a set of numbers, such as a geometric mean
Mean of the sample
The arithmetic average; that is, the sum of the observations divided by the number of
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
A technical trading strategy that combines mechanical rules, such as the CRISMA
In a Treasury auction, bidding for a specific amount of securities at the price, whatever it
the long-run (5–10 years) average production
NUMBER OF DAYS SALES IN RECEIVABLES
(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet.
The average time intervening between the acquisition of materials or services and the final
optimal mix of capital
the combination of capital sources at which the lowest weighted average cost of capital is achieved
That portfolios with low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks.
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
Portfolio turnover rate
For an investment company, an annualized rate found by dividing the lesser of
price/earnings ratio (price to earnings ratio, P/E ratio, PE ratio)
This key ratio equals the current market price
A weighted average of prices of all goods and services where the weights are given by total spending on each good or service. Measured by a price index.
A costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products.
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
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