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Definition of Economic earnings
The real flow of cash that a firm could pay out forever in the absence of any change in
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
earnings of a firm as reported on its income statement.
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
This important ratio equals the net
Percentage of earnings relative to total assets; indication of how
The school of macroeconomic thought prior to the rise of Keynesianism.
A measure of earnings that includes only the results of the primary operating
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
This measure of earnings per share
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.
A measure of profit that
A financial measure defined as revenues less cost of goods sold
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
economic environment in which the firm expects to reside over the life of the
economic components model
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
See: in-substance defeasance.
Exists when the costs and/or revenues of one project depend on those of another.
The extent to which the value of the firm will change because of an exchange rate change.
Cash flow plus change in present value.
the creation of multi-country markets
The period over which a company expects to be able to use an asset.
economic order quantity
Order size that minimizes total inventory costs.
Economic order quantity (EOQ)
The order quantity that minimizes total inventory costs.
economic order quantity (EOQ)
an estimate of the number
economic production run (EPR)
an estimate of the number
Profits in excess of the competitive level.
In project financing, the risk that the project's output will not be salable at a price that will
For any entity, the difference between the market value of all its assets and the market
An agreement between two or more countries that allows the free movement of capital,
Economic Value Added (EVA)
Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge
economic value added (EVA)
a measure of the extent to which income exceeds the dollar cost of capital; calculated
economic value added (EVA)
Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost
when the incremental revenue from the sale of reworked defective units is greater than
The study of the allocation and distribution of scare resources among competing wants.
Fully diluted earnings per shares
earnings per share expressed as if all outstanding convertible securities
Leading economic indicators
economic series that tend to rise or fall in advance of the rest of the economy.
Low price-earnings ratio effect
The tendency of portfolios of stocks with a low price-earnings ratio to
The study of the determination of economic aggregates such as total output and the price level.
The study of firm and individual decisions insofar as they affect the allocation and distribution of goods and services.
net income (also called the bottom line, earnings, net earnings, and net
A term frequently used to describe earnings after the removal of the
Operational Earnings Management
Management actions taken in the effort to create stable
earnings before the effects of any earnings-management activities.
price-earnings (P/E) multiple (ratio)
Ratio of stock price to earnings per share.
Price / Earnings (P/E) Ratio
The ratio of price to earnings. Faster growing or less-risky firms typically have higher P/E ratios than either slower-growing or more risky firms.
Price/earnings ratio (PE ratio)
Shows the "multiple" of earnings at which a stock sells. Determined by dividing current
price/earnings ratio (price to earnings ratio, P/E ratio, PE ratio)
This key ratio equals the current market price
Price to Earnings Ratio (P/E, PE Ratio)
A measure of how much investors are willing to pay for each dollar
Reported net income with selected nonrecurring items of revenue or gain
Real Actions (Earnings) Management
Involves operational steps and not simply acceleration
Accounting earnings that are retained by the firm for reinvestment in its operations;
Profits a company plowed back into the business over the years. Last January’s retained earnings, plus the net income or profit that a company made this year (which is calculated on the income statement), minus dividends paid out, equals the retained earnings balance on the balance sheet date.
The residual earnings of the company.
A company’s accumulated earnings since its inception, less any distributions to shareholders.
earnings not paid out as dividends.
Net profits kept to accumulate in a business after dividends are paid.
Roth IRA. An IRA account whose earnings are not taxable at all under certain
Statement of retained earnings
An adjunct to the balance sheet, providing more detailed information about the beginning balance, changes, and ending balance in
Statement Retained Earnings
One of the basic financial statements; it takes the beginning balance of retained earnings and adds net income, then subtracts dividends. The Statement of Retained earnings is prepared for a specified period of time.
View that incentives to work, save, and invest play an important role in determining economic activity by affecting the supply side of the economy.
Reported earnings that have had the after-tax effects of all material
A very broad term rooted in economic theory and referring to
Refers to one of the two basic sources of capital for a business, the
An indexing strategy that is linked to active management through the emphasis of a
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