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The Journal of Investing is a quarterly peer-reviewed academic journal that covers research on investment management, asset allocation, performance measurement, benchmarking, mutual funds, investing strategies such as 130/30 funds, global allocation, and practical investment ideas and portfolio strategies for the institutional buy-side such as pension funds.
A high proportion of debt, reflected in a high debt-to-equity ratio, tends to make a company's earnings, free cash flow, and ultimately the returns to its investors, riskier or volatile. Investors compare a company's debt-to-equity ratio with those of other companies in the same industry, and examine trends in debt-to-equity ratios and free ...
The Incremental Capital-Output Ratio (ICOR) is the ratio of investment to growth which is equal to the reciprocal of the marginal product of capital. The higher the ICOR, the lower the productivity of capital or the marginal efficiency of capital. The ICOR can be thought of as a measure of the inefficiency with which capital is used. In most ...
Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project.It is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment.
Comparing financial ratios is merely one way of conducting financial analysis. Financial analysts can also use percentage analysis which involves reducing a series of figures as a percentage of some base amount. [1] For example, a group of items can be expressed as a percentage of net income.
In finance, the Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and the reward-to-variability ratio) measures the performance of an investment such as a security or portfolio compared to a risk-free asset, after adjusting for its risk.
Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return. [2] Liquidity ratios measure the availability of cash to pay debt. [3] Efficiency (activity) ratios measure ...
The standard form of the Omega ratio is a non-convex function, but it is possible to optimize a transformed version using linear programming. [4] To begin with, Kapsos et al. show that the Omega ratio of a portfolio is: = [() +] + The optimization problem that maximizes the Omega ratio is given by: [() +], (), =, The objective function is non-convex, so several ...