What is the Book Value Per Share (BVPS)? The book value per share (BVPS) is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. When compared to the current market value per share, the book value per share can provide information on how a company’s stock is…
What is Cap Rate (REIT)? Cap rate is a financial metric that is used by real estate investors to analyze real estate investments, and determine their potential rate of return based on annual returns. It is calculated based on the net income that a real estate investment is expected to generate over a one-year time…
What are Excel Dashboards? Excel dashboards make it easy to perform quick overviews of data reports rather than going through large volumes of data. Overviews help in making quick and urgent decisions since one can skim through a lot of information at once and within a short time. The dashboards help in tracking Key Performance…
What is FMAN (February, May, August, and November)? FMAN is one of the three options cycles, and it comprises multiple options contracts that share the same terms and expire in the months of February, May, August, and November. The Chicago Board Options Exchange requires that commodities, indexes, and common stocks should be assigned to a…
What is a Benchmark? A benchmark is a measure used by individual and institutional investors to analyze the risk and return of a portfolio to understand how it is performing vis-à-vis other market segments. Some of the established benchmarks for standard analysis include the S&P 500, Barclays US Aggregate Bond Index, Russell 2000, and the…
What is the Active Return of a Portfolio? Active return refers to the gains or losses from a portfolio that are directly related to the decisions made by the portfolio manager. The active return can be positive or negative, depending on whether it overperforms or underperforms the market. For example, if the benchmark is 5%…
What is Farmland? In arable regions worldwide, farms are constructed in a variety of ways. Farmland is a real estate asset class that combines cropland (to grow crops), pastureland (to house and raise livestock), and timberland (for logging). Farmland is a productive asset critical to many crop and livestock operations. It may appear on the…
What is the Specific Identification Method? The specific identification method relates to inventory valuation, specifically keeping track of each specific item in inventory and assigning cost individually instead of grouping items together – the manner of calculation that is typically done in the first in, first out (FIFO) and last in, first out (LIFO) methods….
What is Impairment? The impairment of a fixed asset can be described as an abrupt decrease in fair value due to physical damage, changes in existing laws creating a permanent decrease, increased competition, poor management, obsolescence of technology, etc. In the case of a fixed-asset impairment, the company needs to decrease its book value in…
What is Income Summary? The income summary account is an account that receives all the temporary accounts of a business upon closing them at the end of every accounting period. This means that the value of each account in the income statement is debited from the temporary accounts and then credited as one value to…
