The market approach is a method of determining the value of an asset by looking at the prices of similar assets in the marketplace. This approach is often used by investors to value stocks, bonds, and other securities. The market approach is based on the idea that the market price of an asset reflects all … Read more
Cost of revenue (CoR) is the direct costs associated with the production of goods or services. It includes raw materials, labor, and other direct costs incurred in the production process. For manufacturing companies, cost of revenue also includes the cost of goods sold (COGS). For service companies, it includes the cost of labor and other … Read more
Non-GAAP earnings definition is a measure of financial performance that excludes or includes certain items in order to give investors a more accurate picture of a company’s underlying business performance. Non-GAAP earnings is often used by companies to give investors a better understanding of their core profitability, as it excludes one-time items or items that … Read more
The salvage value definition is the value of an asset at the end of its useful life. The salvage value is also known as the scrap value or residual value. The salvage value definition is important for businesses because it is used to calculate the depreciation of an asset. The salvage value definition is also … Read more
The HML ratio is a measure of market risk. It is calculated by subtracting the return on a portfolio of high-risk stocks from the return on a portfolio of low-risk stocks. The resulting number is then divided by the market risk premium. The HML ratio can be used to determine whether a stock is overvalued … Read more
The treasury stock method is a tool that can be used in order to calculate the number of a company’s outstanding shares. This method takes into account the company’s repurchases of its own stock, which reduces the number of outstanding shares. In order to calculate the number of shares using the treasury stock method, the … Read more
Normal Distribution: Overview, Properties, Uses, and Formula What is normal distribution PDF? A normal distribution PDF is a bell-shaped curve that describes how data is distributed. The normal distribution is the most common type of distribution, and the bell-shape of the normal distribution PDF makes it easy to visualize. The normal distribution PDF is also … Read more
Multiple discriminant analysis (MDA) is a statistical tool used to predict the probability of a particular event occurring. It is based on the relationships between a set of independent variables and a dependent variable. The dependent variable is usually a categorical variable, such as “yes” or “no.” The independent variables can be any type of … Read more
The capitalization of earnings definition is the process by which a company’s earnings are used to finance the purchase of additional shares of the company’s stock. The capitalization of earnings process is also known as “internal financing.” A company can use two methods to finance the purchase of additional shares: issuing new shares or using … Read more
The term “headline earnings definition” refers to a method of measuring a company’s earnings that includes all of its one-time items and extraordinary items. This is in contrast to the “net income” or “bottom line” measure of earnings, which excludes these items. The headline earnings definition is useful for comparing a company’s earnings across different … Read more
