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Fundamental descriptors |
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Definition of Fundamental descriptorsFundamental descriptorsIn the model for calculating fundamental beta, ratios in risk indexes other than
Related Terms:Fundamental analysisSecurity analysis that seeks to detect misvalued securities by an analysis of the firm's Fundamental betaThe product of a statistical model to predict the fundamental risk of a security using not Technical descriptorsVariables that are used to describe the market on a technical basis. fundamental analystsAnalysts who attempt to find under- or overvalued securities by analyzing fundamental information, such as earnings, asset values, and business prospects. BARRA's performance analysis (PERFAN)A method developed by BARRA, a consulting firm in Beta (Mutual Funds)The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means Beta equation (Mutual Funds)The beta of a fund is determined as follows: Beta equation (Stocks)The beta of a stock is determined as follows: Break-even analysisAn analysis of the level of sales at which a project would make zero profit. Cluster analysisA statistical technique that identifies clusters of stocks whose returns are highly correlated Common-base-year analysisThe representing of accounting information over multiple years as percentages Comparative credit analysisA method of analysis in which a firm is compared to others that have a desired Country betaCovariance of a national economy's rate of return and the rate of return the world economy Credit analysisThe process of analyzing information on companies and bond issues in order to estimate the Discriminant analysisA statistical process that links the probability of default to a specified set of financial ratios. Expected return-beta relationshipImplication of the CAPM that security risk premiums will be Factor analysisA statistical procedure that seeks to explain a certain phenomenon, such as the return on a Foreign market betaA measure of foreign market risk that is derived from the capital asset pricing model. Horizon analysisAn analysis of returns using total return to assess performance over some investment horizon. Horizontal analysisThe process of dividing each expense item of a given year by the same expense item in Leveraged betaThe beta of a leveraged required return; that is, the beta as adjusted for the degree of Mean-variance analysisEvaluation of risky prospects based on the expected value and variance of possible outcomes. Multiple-discriminant analysis (MDA)Statistical technique for distinguishing between two groups on the Performance attribution analysisThe decomposition of a money manager's performance results to explain Pro forma capital structure analysisA method of analyzing the impact of alternative capital structure Regression analysisA statistical technique that can be used to estimate relationships between variables. Scenario analysisThe use of horizon analysis to project bond total returns under different reinvestment rates Sensitivity analysisanalysis of the effect on a project's profitability due to changes in sales, cost, and so on. Technical analysisSecurity analysis that seeks to detect and interpret patterns in past security prices. Unleveraged betaThe beta of an unleveraged required return (i.e. no debt) on an investment when the Vertical analysisThe process of dividing each expense item in the income statement of a given year by net Zero-beta portfolioA portfolio constructed to represent the risk-free asset, that is, having a beta of zero. VERTICAL ANALYSISA financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year. Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. Ratio analysisA method of analysing financial reports to interpret trends and make comparisons by using ratios – two numbers, with one generally expressed as a percentage of the other. Sensitivity analysisAn approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables. Variance analysisA method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved. Ratio analysisA method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison. capital investment analysisRefers to various techniques and procedures BetaA measure of the riskiness of a specific security compared to the Ratio AnalysisThe process of using financial ratios, calculated from key accounts activity analysisthe process of detailing the various repetitive actions that are performed in making a product or correlation analysisan analytical technique that uses statistical cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course cost driver analysisthe process of investigating, quantifying, incremental analysisa process of evaluating changes that least squares regression analysisa statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares Pareto analysisa method of ranking the causes of variation sensitivity analysisa process of determining the amount of change that must occur in a variable before a different decision would be made variance analysisthe process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences BetaThe price volatility of a financial instrument relative to the price Regression analysisStatistical analysis techniques that quantify the Pareto analysisThe 80:20 ratio that states that 20% of the variables included in an betaSensitivity of a stock’s return to the return on the market break-even analysisanalysis of the level of sales at which the company breaks even. credit analysisProcedure to determine the likelihood a customer will pay its bills. scenario analysisProject analysis given a particular combination of assumptions. sensitivity analysisanalysis of the effects of changes in sales, costs, and so on, on project profitability. simulation analysisEstimation of the probabilities of different possible outcomes, e.g., from an investment project. Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. Failure analysisThe examination of failure incidents to identify components Beta coefficientA measurement of the extent to which the returns on a given stock move with stock market. Beta riskRisk of a firm measured from the standpoint of an investor who holds a highly diversified portfolio. Break-Even AnalysisAn analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero). Financial Trend AnalysisProcess of analyzing financial statements of a company for any continuing relationship.
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