Contribution Analysis
What is Contribution Analysis? Contribution analysis is used in estimating how direct and variable costs of a product affect the net income of a company. It addresses the issue of identifying simple or overhead costs related to several production projects. Contribution analysis aids a company in evaluating how individual business lines or products are performing…
Management Buyout (MBO)
What is a Management Buyout (MBO)? A management buyout (MBO) is a corporate finance transaction where the management team of an operating company acquires the business by borrowing money to buy out the current owner(s). An MBO transaction is a type of leveraged buyout (LBO) and can sometimes be referred to as a leveraged management…
Cash Earnings Per Share
What is Cash Earnings per Share (Cash EPS)? Cash earnings per share (cash EPS) is the operating cash flow generated by a company divided by the number of shares outstanding. Cash earnings per share (Cash EPS) is different from traditional earnings per share (EPS), which takes the company’s net income and divides it by the number…
Stock Option
Treasury Stock
What is Treasury Stock? Treasury stock, or reacquired stock, is the previously issued, outstanding shares of stock which a company repurchased or bought back from shareholders. The reacquired shares are then held by the company for its own disposition. They can either remain in the company’s possession to be sold in the future, or the…
Fixed Asset Turnover
What is Fixed Asset Turnover? Fixed Asset Turnover (FAT) is an efficiency ratio that indicates how well or efficiently a business uses fixed assets to generate sales. This ratio divides net sales by net fixed assets, calculated over an annual period. The net fixed assets include the amount of property, plant, and equipment, less the…
Inventory Turnover Ratio
What is the Inventory Turnover Ratio? The inventory turnover ratio, also known as the stock turnover ratio, is an efficiency ratio that measures how efficiently inventory is managed. The inventory turnover ratio formula is equal to the cost of goods sold divided by total or average inventory to show how many times inventory is “turned” or sold…
Stakeholder vs. Shareholder
What is a Stakeholder vs. Shareholder? The terms “stakeholder” and “shareholder” are often used interchangeably in the business environment. Looking closely at the meanings of stakeholder vs. shareholder, there are key differences in usage. Generally, a shareholder is a stakeholder of the company while a stakeholder is not necessarily a shareholder. A shareholder is a…
MIBOR (Mumbai Inter-Bank Offered Rate)
What is MIBOR? The Mumbai Inter-Bank Offered Rate (MIBOR) is the interest rate benchmark at which banks borrow unsecured funds from one another in the Indian interbank market. It is currently used as a reference rate for corporate debentures, term deposits, forward rate agreements, interest rate swaps, and floating-rate notes. The rate is only offered…
