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It is used to assess the 'operating' profit of the business. It is a rough way of calculating how much cash the business is generating and is even sometimes called the 'operating cash flow'. It can be useful because it removes factors that change the view of performance depending upon the accounting and financing policies of the business.
Return on capital employed is an accounting ratio used in finance, valuation, and accounting. It is a useful measure for comparing the relative profitability of companies after taking into account the amount of capital used. [1]
Values used in calculating financial ratios are taken from the balance sheet, income statement, statement of cash flows or (sometimes) the statement of changes in equity. These comprise the firm's "accounting statements" or financial statements. The statements' data is based on the accounting method and accounting standards used by the ...
In finance, return is a profit on an investment. [1] It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment over a specified time period, such as interest payments, coupons, cash dividends and stock dividends.
Profit is a simple, yet powerful calculation that tells you whether your business is viable in the long run.
Return on capital (ROC), or return on invested capital (ROIC), is a ratio used in finance, valuation and accounting, as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders. [1] It indicates how effective a company is at turning capital into ...
Other costs included in a fund’s expense ratio are taxes, legal fees, accounting, auditing and recordkeeping. While operating expenses can vary for mutual funds, the expense ratio tends to be ...
Here’s everything you need to know about cost basis, including how to calculate it, how it affects your taxes and why it’s vital to your investment strategy. Cost basis in investments: What it ...