What is a Corporate Raider? A corporate raider is an individual or a party that purchases a substantial position (enough to gain a controlling position) in a company that is deemed undervalued. In other words, a corporate raider is an individual that takes control (commonly through a hostile takeover) of an undervalued company. …
What is the CAPEX to Operating Cash Ratio? The CAPEX to Operating Cash Ratio assesses how much of a company’s cash flow from operations is being devoted to capital expenditure. Such investments entail engaging in capital-intensive projects such as expanding a production facility, launching a new product line, or restructuring a division. The CAPEX to Operating…
What is the Operating Cash to Total Cash Ratio? The Operating Cash to Total Cash Ratio measures how much of a business’ generated cash flow comes from its core operations. This can be used as an indicator of how well a business can sustain its current cash management strategy in the long term. A business that…
What is the Times Interest Earned Ratio? The Times Interest Earned (TIE) ratio measures a company’s ability to meet its debt obligations on a periodic basis. This ratio can be calculated by dividing a company’s EBIT by its periodic interest expense. The ratio shows the number of times that a company could, theoretically, pay its…
What is Return on Total Capital (ROTC)? Return on Total Capital (ROTC) is a return on investment ratio that quantifies how much return a company has generated through the use of its capital structure. The ROTC ratio is different from return on common equity (ROCE), as the former quantifies the return a company has made…
What is the Times Interest Earned Ratio (Cash Basis)? The Times Interest Earned (Cash Basis) (TIE-CB) ratio is very similar to the Times Interest Earned Ratio. Times Interest Earned (Cash Basis) measures a company’s ability to make periodic interest payments on its debt. The main difference between the two ratios is that Times Interest Earned…
What is Wall Street? There are two ways to look at what Wall Street is. It is both a geographical location and the financial mecca of the U.S. (and, arguably, of the world). Geographically, Wall Street spans eight blocks in Manhattan, New York. It runs east to west from Broadway to South Street, in the…
What is a Currency Swap Contract? A currency swap contract (also known as a cross-currency swap contract) is a derivative contract between two parties that involves the exchange of interest payments, as well as the exchange of principal amounts in certain cases, that are denominated in different currencies. Although currency swap contracts generally imply the…
What is an Equity Swap Contract? An equity swap contract is a derivative contract between two parties that involves the exchange of one stream (leg) of equity-based cash flows linked to the performance of a stock or an equity index with another stream (leg) of fixed-income cash flows. In equity swap contracts, the cash flows…
