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Cumulative abnormal return (CAR) |
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Definition of Cumulative abnormal return (CAR)Cumulative abnormal return (CAR)Sum of the differences between the expected return on a stock and the
Related Terms: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. Abnormal returnsPart of the return that is not due to systematic influences (market wide influences). In Absolute Right of ReturnGoods may be returned to the seller by the purchaser without restrictions. Accounting rate of return (ARR)A method of investment appraisal that measures 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 After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. annual returnThe 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 returnThe annual rate of return that when compounded t times, would have Arithmetic average (mean) rate of returnArithmetic mean return. Arithmetic mean returnAn average of the subperiod returns, calculated by summing the subperiod returns Average accounting returnThe 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. Balanced ScorecardA system of non-financial performance measurement that links innovation, customer and process measures to financial performance. balanced scorecard (BSC)an approach to performance book rate of returnAccounting income divided by book value. Book ReturnsBook 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. CarA loose quantity term sometimes used to describe a the amount of a commodity underlying one CARDsCertificates of Amortized Revolving Debt. Pass-through securities backed by credit card receivables. Carring costsCosts that increase with increases in the level of investment in current assets. CarryRelated:net financing cost. carrying costthe total variable cost of carrying one unit of Carrying costThe cost of holding inventory, which can include insurance, carrying costsCosts of maintaining current assets, including opportunity cost of capital. Carrying valueBook value. CARsCertificates of Automobile Receivables. Pass-through securities backed by automobile receivables. Cash and carryPurchase of a security and simultaneous sale of a future, with the balance being financed Clear CardA credit card from which payments are deducted over subsequent time periods. Cost of carryRelated: Net financing cost credit cardA revolving source of credit with a pre-established limit. You have to pay interest on a credit card if you have an outstanding balance. Cumulative dividend featureA requirement that any missed preferred or preference stock dividends be paid Cumulative-Effect AdjustmentThe cumulative, after-tax, prior-year effect of a change in accounting Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Cumulative preferred stockPreferred stock whose dividends accrue, should the issuer not make timely Cumulative probability distributionA function that shows the probability that the random variable will Cumulative Translation Adjustment (CTA) accountAn entry in a translated balance sheet in which gains Cumulative votingA system of voting for directors of a corporation in which shareholder's total number of cumulative votingVoting system in which all the votes one shareholder is allowed to cast can be cast for one candidate for the board of directors. debit cardA card which enables you to directly access your bank account when paying for purchases. So instead of paying in cash or with a credit card, a debit card allows the specified amount of the purchase to be electronically debited, or withdrawn, from your bank account. See Interac Direct Payment for an explanation of the actual procedures that you follow at the point of sale (POS) terminal to use your debit card. Dollar returnThe return realized on a portfolio for any evaluation period, including (1) the change in market Dollar-weighted rate of returnAlso called the internal rate of return, the interest rate that will make the Ex post returnRelated: Holding period return Exante returnThe expected return of a portfolio based on the expected returns of its component assets and Excess return on the market portfolioThe difference between the return on the market portfolio and the Excess returnsAlso called abnormal returns, returns in excess of those required by some asset pricing model. Expected future returnThe return that is expected to be earned on an asset in the future. Also called the Expected returnThe return expected on a risky asset based on a probability distribution for the possible rates Expected ReturnThe total amount of money (return) an investor anticipates to receive from an investment. Expected return-beta relationshipImplication of the CAPM that security risk premiums will be Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Geometric mean returnAlso called the time weighted rate of return, a measure of the compounded rate of Green CardThe I-551 Permanent Resident card, held by a resident alien. Holding period returnThe rate of return over a given period. Horizon returnTotal return over a given horizon. Incremental internal rate of returnIRR on the incremental investment from choosing a large project Internal rate of returnDollar-weighted rate of return. Discount rate at which net present value (NPV) Internal rate of return a. The average annual yield earned by an investment during the period held. Internal rate of returnThe rate of return at which the present value of a series of future Internal rate of return (IRR)A discounted cash flow technique used for investment appraisal that calculates the effective cost of capital that produces a net present value of zero from a series of future cash flows and an internal rate of return (IRR)The precise discount rate that makes the Internal Rate of Return (IRR)The discount rate that equates the present value of the net cash internal rate of return (IRR)the expected or actual rate of internal rate of return (IRR)Discount rate at which project NPV = 0. Inventory returnsInventory returned from a customer for any reason. This receipt Leveraged required returnThe required return on an investment when the investment is financed partially by debt. Loss carrybackThe offsetting of a current year loss against the reported taxable Loss carryforwardThe offsetting of a current year loss against the reported taxable Market returnThe return on the market portfolio. Money rate of returnAnnual money return as a percentage of asset value. Monte Carlo simulationAn analytical technique for solving a problem by performing a large number of trail Monte-Carlo simulationA mathematical modeling process. For a model that Multiple rates of returnMore than one rate of return from the same project that make the net present value Negative carryRelated: net financing cost Non-cumulative preferred stockPreferred stock whose holders must forgo dividend payments when the PaycardA credit card into which a company directly deposits an employee's net pay. Portfolio internal rate of returnThe rate of return computed by first determining the cash flows for all the Positive carryRelated:net financing cost procurement carda card given to selected employees as a Purchase returnsA contra account that reduces purchases by the amount of items purchased that were subsequently returned. rate of returnTotal income per period per dollar invested. Rate of Returnreturn on invested capital (calculated as a percentage). Often an investor has, as one of their investment criteria, a minimum acceptable rate of return on an acquisition. RATE OF RETURN ON STOCKHOLDERS’ EQUITYThe percentage return or profit that management made on each dollar stockholders invested in a company. Here’s how you figure it: RATE OF RETURN ON TOTAL ASSETSThe percentage return or profit that management made on each dollar of assets. The formula is: Rate of return ratiosRatios that are designed to measure the profitability of the firm in relation to various Realized returnThe return that is actually earned over a given time period. Required returnThe minimum expected return you would require to be willing to purchase the asset, that is, ReturnThe change in the value of a portfolio over an evaluation period, including any distributions made ReturnSee yield. return of capitalthe recovery of the original investment (or principal) in a project Return on assets (ROA)Indicator of profitability. Determined by dividing net income for the past 12 months return on assets (ROA)Although there is no single uniform practice for return on capitalincome; it is equal to the rate of return multiplied by the amount of the investment Return on capital employed (ROCE)The operating profit before interest and tax as a percentage of the total shareholders’ funds plus Return on Common Equity RatioA measure of the percentage return earned on the value of the Return on equity (ROE)Indicator of profitability. Determined by dividing net income for the past 12 return on equity (ROE)This key ratio, expressed as a percent, equals net return on investmenta ratio that relates income generated Return on investment (ROI)Generally, book income as a proportion of net book value. RETURN ON INVESTMENT (ROI)In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a business as a whole.
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