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Definition of Bogey
The return an investment manager is compared to for performance evaluation.
The level of earnings in an incentive compensation or bonus plan below which no incentive
A retirement plan set up by an employer, into which employees can
A retirement plan similar to a 401k plan, except that it is designed
Part of the return that is not due to systematic influences (market wide influences). In
Goods may be returned to the seller by the purchaser without restrictions.
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
the maximum limit for the number of defects or errors in a process
earnings of a firm as reported on its income statement.
A method of investment appraisal that measures
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
The sum of cash, accounts receivable, and short-term marketable
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
Money after-tax rate of return minus the inflation rate.
A budgeting process using summary-level information to
The fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns.
Annualized holding period return
The annual rate of return that when compounded t times, would have
Arithmetic average (mean) rate of return
Arithmetic mean return.
Arithmetic mean return
An average of the subperiod returns, calculated by summing the subperiod returns
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
basic earnings per share (EPS)
This important ratio equals the net
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
a cost that is caused by a group of things
A devaluation that is designed to cheapen a nation's currency and thereby
book rate of return
Accounting income divided by book value.
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
Business Expansion Investment
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
A flexible benefits plan authorized under the Internal Revenue
cafeteria plan a “menu” of fringe benefit options that include
cash or nontaxable benefits
Canada Pension Plan (CPP)
A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).
capital investment analysis
Refers to various techniques and procedures
Money used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses.
CARs (cumulative abnormal returns)
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for investment Management and Research (AIMR)'s performance Presentation Standards Implementation
All forms of pay given to an employee in exchange for services rendered.
a company committee comprised mainly of members of the board of directors; is responsible
a foundation for the compensation plan that addresses the role compensation should play in the organization
The degree of assurance that a specified failure rate is not exceeded.
A measure of earnings that includes only the results of the primary operating
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Cumulative abnormal return (CAR)
Sum of the differences between the expected return on a stock and the
pay related to current performance
Defined benefit plan
A pension plan in which the sponsor agrees to make specified dollar payments to
Defined Benefit Plan
A pension plan that pays out a predetermined dollar
Defined contribution plan
A pension plan in which the sponsor is responsible only for making specified
Defined Contribution Plan
A qualified retirement plan under which the employer
Fall in the government-determined fixed exchange rate.
Devaluation A decrease in the spot price of the currency
diluted earnings per share (EPS)
This measure of earnings per share
Withdrawal of funds from a financial institution in order to invest them directly.
Dividend reinvestment plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a
The return realized on a portfolio for any evaluation period, including (1) the change in market
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
earned income is generally an individual's salary or wages from employment. It Also includes some taxable benefits. earned income Also includes business income if the individual is self-employed. earned income is used as the basis for calculating RRSP maximum contribution limits.
Net income for the company during the period.
In general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax.
earnings before interest and income tax (EBIT)
A measure of profit that
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
The active manipulation of earnings toward a predetermined target.
Earnings per Share
A measure of the earnings generated by a company on a per
Earnings per share (EPS)
EPS, as it is called, is a company's profit divided by its number of outstanding
earnings per share (EPS)
See basic earnings per share and diluted earnings per share.
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
Earnings retention ratio
Positive or negative differences from the consensus forecast of earnings by institutions
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
EBBS - Earnings before the bad stuff
An acronym attributed to a member of the Securities and
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
The real flow of cash that a firm could pay out forever in the absence of any change in
Educational Assistance Plan
A plan that an employer creates on behalf of its
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Employee Stock Ownership Plan (ESOP)
a profit-sharing compensation program in which investments are made in
Employee Stock Ownership Plan (ESOP)
A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer.
enterprise resource planning (ERP) system
a packaged software program that allows a company to
Enterprise resource planning system
A computer system used to manage all company
An agreement in which one party agrees to pay the other at specific time periods if a specific
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
An insurance program designed to provide funds for insured's dependents upon death of the insured, and to Also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs.
The time interval over which a money manager's performance is evaluated.
Ex post return
Related: Holding period return
The expected return of a portfolio based on the expected returns of its component assets and
Excess return on the market portfolio
The difference between the return on the market portfolio and the
Also called abnormal returns, returns in excess of those required by some asset pricing model.
Expected future return
The return that is expected to be earned on an asset in the future. Also called the
The return expected on a risky asset based on a probability distribution for the possible rates
The total amount of money (return) an investor anticipates to receive from an investment.
Expected return-beta relationship
Implication of the CAPM that security risk premiums will be
Expected return on investment
The return one can expect to earn on an investment. See: capital asset
a monetary reward provided for performance
An expression of economic benefit that motivates behavior that might otherwise not take place.
Institutions that provide the market function of matching borrowers and lenders or
Firm that raises money from many small investors and provides financing to businesses or other
Any institution, such as a bank, that takes deposits from savers and loans them to borrowers.
The process whereby financial intermediaries channel funds from lender/savers to borrower/spenders.
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