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WEIGHTED AVERAGE |
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Definition of WEIGHTED AVERAGEWEIGHTED AVERAGEAn inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale. Weighted averageA method of accounting for inventory.
Related Terms:Weighted average cost of capitalExpected return on a portfolio of all the firm's securities. Used as a hurdle Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Weighted average lifeSee:average life. Weighted average maturityThe WAM of a MBS is the weighted average of the remaining terms to maturity Weighted average remaining maturityThe average remaining term of the mortgages underlying a MBS. Weighted average portfolio yieldThe weighted average of the yield of all the bonds in a portfolio. Weighted average cost of capitalSee cost of capital. weighted-average cost of capitalweighted means that the proportions of Weighted Average Cost of Capital (WACC)The weighted average of the costs of the capital components weighted average cost of capitala composite of the cost of the various sources of funds that comprise a firmâ€™s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value weighted average method (of process costing)the method of cost assignment that computes an average cost per weighted-average cost of capital (WACC)Expected rate of return on a portfolio of all the firmâ€™s securities, adjusted for tax savings due to interest payments. Weighted Average Cost of Capital (WACC)A weighted average of the component costs of debt, preferred shares, and common equity. Also called the composite cost of capital. Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Dividends per shareDividends paid for the past 12 months divided by the number of common shares Earnings per share (EPS)EPS, as it is called, is a company's profit divided by its number of outstanding Expected valueThe weighted average of a probability distribution. Market value-weighted indexAn index of a group of securities computed by calculating a weighted average Terms of tradeThe weighted average of a nation's export prices relative to its import prices. WACCSee: weighted average cost of capital. DurationThe weighted average of the time until maturity of each of the VarianceThe weighted average of the squared deviations from the cost of capital (COC)the weighted average cost of the discount ratethe rate of return used to discount future cash labor rate variancethe actual rate (or actual weighted average rate) paid to labor for the period minus the standard rate multiplied by all hours actually worked during the period; optimal mix of capitalthe combination of capital sources at which the lowest weighted average cost of capital is achieved Macaulay durationA widely used measure of price sensitivity to yield Effective Exchange RateThe weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country. Price LevelA weighted average of prices of all goods and services where the weights are given by total spending on each good or service. Measured by a price index. Arithmetic average (mean) rate of returnArithmetic mean return. AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Average (across-day) measuresAn estimation of price that uses the average or representative price of a Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. Dollar-weighted rate of returnAlso called the internal rate of return, the interest rate that will make the Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Moving averageUsed in charts and technical analysis, the average of security or commodity prices Simple moving averageThe mean, calculated at any time over a past period of fixed length. Time-weighted rate of returnRelated: Geometric mean return. Average Collection Periodaverage number of days necessary to receive cash for the sale of Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging Average inventoryThe beginning inventory for a period, plus the amount at the end of Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. average tax rateTotal taxes owed divided by total income. Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 â€śblue-chipâ€ť stocks. Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Geometric mean returnAlso called the time weighted rate of return, a measure of the compounded rate of Lag response of prepaymentsThere is typically a lag of about three months between the time the weighted Macaulay durationThe weighted-average term to maturity of the cash flows from the bond, where the WACCSee weighted-average cost of capital.
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