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Gatz et al. mention that the above formulation was published by Endlich et al. (1988) when treating the weighted mean as a combination of a weighted total estimator divided by an estimator of the population size, [5] based on the formulation published by Cochran (1977), as an approximation to the ratio mean. However, Endlich et al. didn't seem ...
This methodology was introduced by Evsey Domar (1961). [5] Economist Charles Hulten developed this theory more formally in a model of a closed economy. [2] [3]Hulten (1978) used "observed expenditure shares" as weights, and in that model "the first-order impact on output of a TFP shock to a firm or an industry is equal to that industry or firm’s sales as a share of output."
The weighted average return on assets, or WARA, is the collective rates of return on the various types of tangible and intangible assets of a company.. The presumption of a WARA is that each class of a company's asset base (such as manufacturing equipment, contracts, software, brand names, etc.) carries its own rate of return, each unique to the asset's underlying operational risk as well as ...
IAS 2 defines inventories as assets which are: . held for sale in the ordinary course of business, in the process of production for such sale, or; in the form of materials or supplies to be consumed in the production or rendering of services.
The rate of return on a portfolio can be calculated indirectly as the weighted average rate of return on the various assets within the portfolio. [3] The weights are proportional to the value of the assets within the portfolio, to take into account what portion of the portfolio each individual return represents in calculating the contribution of that asset to the return on the portfolio.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management.
Here, "residual" means in excess of any opportunity costs measured relative to the book value of shareholders' equity; residual income (RI) is then the income generated by a firm after accounting for the true cost of capital. The approach is largely analogous to the EVA/MVA based approach, with similar logic and advantages. Residual Income ...