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…
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…
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…
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…
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…
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…
What is a Leveraged Buyout (LBO)? In corporate finance, a leveraged buyout (LBO) is a transaction in which a company is acquired using debt as the primary source of consideration. These transactions typically occur when a private equity (PE) firm borrows as much as it can from a variety of lenders (up to 70 or 80 percent…
What are Hedge Fund Strategies? In this article, we will explore the main hedge fund strategies. But first, what is a hedge fund? A hedge fund is an investment fund created by accredited investors and institutional investors for the purpose of maximizing returns and reducing or eliminating risk, regardless of market climb or decline. It…
What is Material Nonpublic Information? Material Nonpublic Information is information that would affect the market value or trading of a security and that has not been disseminated to the general public. It is considered insider information. Information is considered to be “material” if its dissemination to the public would likely affect the market value or…
