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A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
A financial calculator or business calculator is an electronic calculator that performs financial functions commonly needed in business and commerce communities [1] (simple interest, compound interest, cash flow, amortization, conversion, cost/sell/margin, depreciation etc.).
Profitable Growth is the combination of profitability and growth, more precisely the combination of Economic Profitability and Growth of Free cash flows. Profitable growth is aimed at seducing the financial community; it emerged in the early 80s when shareholder value creation became firms’ main objective.
The sustainable growth rate is the growth rate in profits that a company can reasonably achieve, consistent with its established financial policy.Relatedly, an assumption re the company's sustainable growth rate is a required input to several valuation models — for instance the Gordon model and other discounted cash flow models — where this is used in the calculation of continuing or ...
A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization and EBIT), and then determines the optimal use of debt versus equity (equity value).
The residual is often defined as the growth rate of output not explained by the share-weighted growth rates of the inputs. [7]: 6 We can use the real process data of the production model in order to show the logic of the growth accounting model and identify possible differences in relation to the productivity model. When the production data is ...
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Profit margin is an indicator of a company's pricing strategies and how well it controls costs. Differences in competitive strategy and product mix cause the profit margin to vary among different companies. [3] If an investor makes $10 revenue and it cost them $1 to earn it, when they take their cost away they are left with 90% margin.