What is Earnings Per Share (EPS)? Earnings per share (EPS) is a key metric used to determine the common shareholder’s portion of the company’s profit. EPS measures each common share’s profit allocation in relation to the company’s total profit. IFRS uses the term “ordinary shares” to refer to common shares. The EPS figure is important…
What is the Federal Reserve Central Bank (The Fed)? The Federal Reserve, more commonly referred to as “The Fed,” is the central bank of the United States of America and is the supreme financial authority behind the world’s largest free-market economy. Because of the magnitude of the US’ influence on the global economy, ‘the Fed’…
What is the Cash Conversion Ratio (CCR)? The Cash Conversion Ratio (CCR), also known as the cash conversion rate, is a financial management tool that measures a company’s cash flows relative to its net profit. In other words, it is a comparison of the cash flow a company generates with its accounting profit. Understanding Cash…
What is Common Size Analysis? Common size analysis, also referred to as vertical analysis, is a tool that financial managers use to analyze financial statements. It evaluates financial statements by expressing each line item as a percentage of a base amount for that period. The analysis helps to understand the impact of each item in…
What is the Bank for International Settlements (BIS)? The Bank for International Settlements (BIS) was established in 1930 and is owned by the central banks of different countries. It serves as a bank for member central banks, and its role is to foster international monetary and financial stability and cooperation. The Bank for International Settlements…
What is the NASDAQ-100 Index? The NASDAQ-100 Index is a stock market index that includes 100 of the largest, most actively traded non-financial companies listed on the Nasdaq Stock Market. A stock market index helps investors compare current and past price levels in order to calculate the overall market’s performance. The NASDAQ-100 Index includes many…
What is an Auditor? An auditor is a person or a firm assigned to perform an audit on an organization. An audit is a structured, methodical process that includes an examination of books, accounts, records, or various documents. The audit can be on any topic. However, from a financial perspective, an auditor will examine the…
What is an Activist Investor? An activist investor is an individual or institutional investor that seeks to acquire a controlling interest in a target company by gaining seats on the company’s board of directors. Activist investors are looking to make significant changes to the target company and unlock perceived hidden value within the target company….
What is a Naked Call? A naked call is a type of option strategy where an investor writes (sells) a call option without the security of owning the underlying stock. The investor must take the short side of the call option in order to deliver shares of the underlying security if the option is exercised…
What is Earnings Season? Earnings season is the time during which publicly traded companies announce their financial results in the market. The time occurs at the end of every quarter, i.e., four times a year for U.S. companies. Companies in other regions have different reporting periods, such as Europe, where companies report semi-annually. Timing of…
