What is the Back-End Ratio? The back-end ratio is a measure that signifies the portion of monthly income used to settle debts. Lenders, such as bondholders or issuers of mortgages, use the ratio to determine the borrower’s ability to manage and pay off monthly expenses. Therefore, the back-end ratio assesses the borrower’s risk. If the…
What is Backtesting? Backtesting involves applying a strategy or predictive model to historical data to determine its accuracy. It can be used to test and compare the viability of trading strategies so traders can employ and tweak successful strategies. How Backtesting Works Analysts use backtesting as a way to test and compare various trading techniques…
What is Net Investment? Net investment is the total amount of funds that are spent by a company to purchase capital assets, less the associated depreciation of the assets. The net investment figure provides an accurate depiction of how much is spent on tangible assets such as property, plant and equipment (PP&E) and other capital…
Types of Errors in VBA for Excel Users will often encounter different types of errors in VBA. Below, we offer several strategies for dealing with and resolving them. We will go through techniques you can use to interrogate your code during testing, as well as methods of catching errors at runtime. Testing and tracking down…
Tips for Writing VBA in Excel Listed below are nine tips for writing VBA in Excel. VBA for Excel introduces countless possibilities for custom calculations and automation. Often, code can run into the hundreds or even thousands of lines. As the complexity and size of code increases, it becomes increasingly important to write fast and…
What is the Business Life Cycle? The business life cycle is the progression of a business in phases over time and is most commonly divided into five stages: launch, growth, shake-out, maturity, and decline. The cycle is shown on a graph with the horizontal axis as time and the vertical axis as dollars or various…
What is an English Auction? An English Auction, also referred to as an open cry ascending auction, starts by an auctioneer announcing the suggested opening bid or reserve price for the item on sale. The buyers with interest in the item start placing bids on the item on sale, with the auctioneer accepting higher bids…
Capital Allocation Line (CAL) and Optimal Portfolio The Capital Allocation Line (CAL) is a line that graphically depicts the risk-and-reward profile of assets, and can be used to find the optimal portfolio. The process to construct the CAL for a collection of portfolios is described below. Portfolio expected return and variance For the sake of…
What is EBITDA Margin? EBITDA margin is a profitability ratio that measures how much in earnings a company is generating before interest, taxes, depreciation, and amortization, as a percentage of revenue. EBITDA Margin = EBITDA / Revenue. The earnings are calculated by taking sales revenue and deducting operating expenses, such as the cost of goods…
