|Earnings per Share|
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Definition of Earnings per Share
Earnings per Share
A measure of the earnings generated by a company on a per
This important ratio equals the net
This measure of earnings per share
EPS, as it is called, is a company's profit divided by its number of outstanding
See basic earnings per share and diluted earnings per share.
How much profit a company made on each share of common stock this year.
earnings per share expressed as if all outstanding convertible securities
A company that pays out all earnings per share to stockholders as dividends. Or, a company or
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25. 50 = 10
Ratio of stock price to earnings per share.
Shows the "multiple" of earnings at which a stock sells. Determined by dividing current
This key ratio equals the current market price
A measure of how much investors are willing to pay for each dollar
Program by which a corporation buys back its own shares in the open market. It is usually
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
Abusive Earnings Management
A characterization used by the Securities and Exchange
earnings of a firm as reported on its income statement.
The period of time for which financial statements are produced – see also financial year.
Adjusted Cash Flow Provided by Continuing Operations
Cash flow provided by operating
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
annual percentage rate (APR)
Interest rate that is annualized using simple interest.
Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually
Annualized holding period return
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
authorized share capital
Maximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation.
Number of shares authorized for issuance by a firm's corporate charter.
The number of shares of stock that the company is legally authorized to sell.
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
Basic Earnings Power Ratio
percentage of earnings relative to total assets; indication of how
book value and book value per share
Generally speaking, these terms
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Book Value per Share
The book value of a company divided by the number of shares
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
Cash Flow Provided by Operating Activities
With some exceptions, the cash effects of transactions
CASH FLOWS FROM OPERATIONS
A section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business.
Short-term unsecured promissory notes issued by a corporation. The maturity of
Short-term unsecured notes issued by firms.
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s performance Presentation Standards Implementation
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
A measure of earnings that includes only the results of the primary operating
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
The length of time for which the customer is granted credit.
Critical Growth Periods
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
degree of operating leverage
a factor that indicates how a percentage change in sales, from the existing or current
degree of operating leverage (DOL)
percentage change in profits given a 1 percent change in sales.
Commercial paper sold directly by the issuer to investors.
A business segment that has been or is planned to be closed or sold off.
Net income and the gain or loss on disposal of a business segment whose assets and operations are clearly distinguishable from the other assets and operations of an entity.
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
the degree of variability or difference; it is measured
Dividends per share
Amount of cash paid to shareholders expressed as dollars per share.
Dividends per share
Dividends paid for the past 12 months divided by the number of common shares
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 retention ratio
Positive or negative differences from the consensus forecast of earnings by institutions
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
Short-term notes with maturities up to 360 days that are issued by companies in
The time interval over which a money manager's performance is evaluated.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Extended Amortization Period
An amortization period that continues beyond a long-lived asset's economic useful life.
Extended Amortization Periods
Amortizing capitalized expenditures over estimated useful lives that are unduly optimistic.
Farm Improvement and Marketing Cooperatives Loans Act
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
Full Credit Period
The period of trade credit given by a supplier to its customer.
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days.
Length of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period.
A constant stream of cash flows without end that is expected to rise indefinitely.
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
Extremely high inflation.
Income from Continuing Operations
After-tax net income before discontinued operations,
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
Issued share capital
Total amount of shares that are in issue. Related: outstanding shares.
The number of shares that the company has sold to the public.
shares that have been issued by the company.
Low price-earnings ratio effect
The tendency of portfolios of stocks with a low price-earnings ratio to
Management/closely held shares
percentage of shares held by persons closely related to a company, as
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