Stock Options Definition A stock option is a financial instrument that gives its holder the right but not the obligation to buy or sell a security for a set price on or before a set date. Stock options are traded on financial bonuses. A stock option contract typically consists of no less than 100 options.
See Also: Financial Ratios Return on Asset Required Rate of Return Return on Invested Capital (ROIC) Debt to Equity Ratio Return on Common Equity (ROCE) What The CEO Wants You to Know How Your Company Really Works Return on Equity Analysis Defined also as return on net worth (RONW), return on equity reveals how much
See Also: Accounting Income vs Economic Income Capital Gains Proforma Earnings Operating Income Net Income Asset Market Value vs Asset Book Value Realized and Unrealized Gains and Losses Explanation In accounting, there is a difference between realized and unrealized gains and losses. Realized income or losses refer to profits or losses from completed transactions. Unrealized
Return on Common Equity (ROCE) Definition The return on common equity, or ROCE, is defined as the amount of profit or net income a company earns per investment dollar. The investment dollars differ in that it only accounts for common shareholders. This is often beneficial because it allows companies and investors alike to see what sort of
See Also: Return on Asset Analysis Return on Equity Analysis Financial Ratios Return on Invested Capital (ROIC) Current Ratio Analysis Return on Capital Employed (ROCE) Definition The return on capital employed ratio is used as a measurement between earnings, and the amount invested into a project or company. Return on Capital Employed (ROCE) Meaning The
See Also: Financial Ratios Internal Rate of Return Method Net Present Value Method Net Present Value vs Internal Rate of Return Required Rate of Return What The CEO Wants You to Know Return on Asset Definition Return on asset (ROA) reveals how much profit a company earned in comparison to its overall asset. The value
See Also: Margin vs Markup Retail Markup Example Max owns a retail store called Retailco. Retailco sells clothing as well as other items common to department stores. Max’s company has just opened their doors and is still finding a place in the market. As a result, some of the essential financial ratios have not been
See Also: Retail Markup Example Margin vs Markup Buyer Bargaining Power (one of Porter’s Five Forces) Supplier Power (one of Porter’s Five Forces) Marking-to-Market Free Cash Flow Analysis Retail Markup Definition Retail markup is the difference between the price of a product and the cost of that product. Retail markup percentage is the retail markup
See Also: Profitability Index Method Profitability Index Method Formula Use the following formula where PV = the present value of the future cash flows in question. Profitability Index = (PV of future cash flows) ÷ Initial investment Or = (NPV + Initial investment) ÷ Initial Investment: As one would expect, the NPV stands for the Net Present Value of
See Also: Profitability Index Method Formula Net Present Value Method Net Present Value versus Internal Rate of Return Time Value of Money Adjusted Present Value (APV) Method of Valuation Future Value Profitability Index Definition Profitability index method measures the present value of benefits for every dollar investment. In other words, it involves the ratio that
Profit Center Definition In accounting, a profit center is a type of responsibility center. A responsibility center is an organizational subunit the manager of which is responsible for certain financial and non-financial performance measures. Furthermore, for accounting purposes, consider a responsibility center – in this case a profit center – a distinct entity within the
Product Life Cycle Definition A product life cycle, defined is the period from when a product goes through its initial specifications and research to the withdrawal of that product from the market. There are five product life cycle stages. Product Life Cycle Meaning The product cycle stages are as follows: Research and Development This is
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