What is Incremental Budgeting? Incremental budgeting is a type of a budgeting process that is based on the idea that a new budget can best be developed by making only some marginal changes to the current budget. In other words, with incremental budgeting, the current budget is used as a base to which incremental assumptions…
What is the H-Model? The H-model is a quantitative method of valuing a company’s stock price. The model is very similar to the two-stage dividend discount model. However, it differs in that it attempts to smooth out the growth rate over time, rather than abruptly changing from the high growth period to the stable growth…
What are Metal Royalties and Streams? Metal royalty and streaming companies fund mines in exchange for money or precious metal. Mines often have trouble getting funding through traditional routes, such as banks, because of the high costs and unpredictable revenue associated with the mining industry. This is why they borrow funds from royalty and streaming companies….
What is the Barbell Strategy? The barbell strategy involves investors purchasing short-term and long-term bonds, but not intermediate-term bonds. The particular distribution on the two extreme ends of the maturity timeline creates a barbell shape. The strategy offers investors exposure to high yielding bonds with limited risk. Why Use a Barbell Strategy? The barbell strategy…
What is Rolling Down the Yield Curve? Rolling down the yield curve is when investors sell bonds before their maturity date, in order to get a higher profit. This is a fixed income strategy that investors use in a low interest rate environment. The strategy gets its name from the fact that investors are selling…
What is Gross Gaming Revenue (GGR)? Gross gaming revenue (GGR), also called game yield, is a key metric used by gambling and betting companies. It reflects the difference between the amount of money players wager minus the amount that they win. It is important to note that gross gaming revenue is equivalent to “sales” or…
What is the Cash Turnover Ratio (CTR)? The cash turnover ratio (CTR) is an efficiency ratio that shows the number of times cash is turned over in an accounting period. The cash turnover ratio works most effectively for companies that do not offer credit sales. Formula for the Cash Turnover Ratio The formula for calculating…
What is the Operating Asset Turnover Ratio? The operating asset turnover ratio, an efficiency ratio, is a variation of the total asset turnover ratio and identifies how well a company is using its operating assets to generate revenue. Operating assets are assets that are essential to the day-to-day operations of a business. In other words,…
What is Shareholder Yield? Shareholder yield refers to how much money shareholders receive from a company that is in the form of cash dividends, net stock repurchases, and debt reduction. Understanding Shareholder Yield The term was first used by Epoch Investment Partners’ William Priest in his 2005 paper entitled “The Case for Shareholder Yield as…
What is Tone at the Top? Tone at the top, commonly referred to in auditing, is used to define a company’s management and board of director’s leadership and their commitment to being honest and ethical. The tone at the top sets forth a company’s cultural environment and corporate values. History of Tone at the Top…
