Search results
Baltic Investment
Baltic Stock Exchange Baltic stock exchange now belongs to the world gigantic stock exchange NASDAQ OMX, and now is called NASDAQ OMX Baltic. Historically Lithuania, Latvia and Estonia had their own nati
http://www.investingforbeginners.eu/baltic_investment-p0-i21
Investing in Unprofitable Companies
Investment Strategy - Unprofitable Companies Investing in companies that are still unprofitable is more difficult than investing in profitable companies, but may also be very successful. If the company will turn around
http://www.investingforbeginners.eu/investing_in_unprofitable_companies
Dividend Payout Ratio
Payout ratio is a percentage that shows a portion of company’s income distributed as dividends. Formula Dividend payout ratio = common shares dividends / net income *For the sam
http://www.investingforbeginners.eu/dividend_payout_ratio
Real Estate Investment Trust (REIT)
Real estate investment trust (REIT) is a corporate entity that invests exceptionally in to real estate sector. Usually securities of REIT’s are traded on stock exchange and every investor can easily acquire
http://www.investingforbeginners.eu/real_estate_investment_trust_reit
Return on Investment
Return on investment (ROI) is a percentage that shows profitability of an investment or investment portfolio. Return on investment calculation: CALCULATION: Return on investment = net in
http://www.investingforbeginners.eu/return_on_investment
Earnings Per Share
Earnings per share (EPS) shows how much of net earnings are allocated to one common share. EPS might give some guidance about the value of the share for shareholder. Share price compared to EPS is equal to P/E ra
http://www.investingforbeginners.eu/earnings_per_share
ROE
ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha
http://www.investingforbeginners.eu/roe
ROA
ROA (Return on Assets) shows what profits are earned by company’s assets. Of course, assets alone usually do not earn the profit, because most of the times profit is the result of know-how and hard work of
http://www.investingforbeginners.eu/roa
Financial Statements
Financial statements are periodically by the companies issued reports that provide the most important financial information about company’s financial condition and success of activity. There
http://www.investingforbeginners.eu/financial_statements
Income Statement
Income statement (also called statement of operations, profit and loss statement, P&L or other) is one of three main financial statements reported by the companies periodically. Income statement exposes compa
http://www.investingforbeginners.eu/income_statement
Earnings
Earnings are calculated gains of the company and should represent the profit of that business. There are several types of earnings: Retained earnings are equal to net profit less dividends. Net earnin
http://www.investingforbeginners.eu/earnings
Profit
Profit is a term used in various finance fields and may have many meanings. Basically profit is the positive difference between the income and costs. If costs are higher than income, then instead of profit loss w
http://www.investingforbeginners.eu/profit
Income
The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu
http://www.investingforbeginners.eu/income
net income
net income (net profit) is a financial indicator of the company that shows the real profitability of the business in accordance to its capital structure. net income is equal to all revenue and gains less all expe
http://www.investingforbeginners.eu/net_income
Gross Income
Gross income (gross profit) is equal to company’s revenue minus all cost of goods sold (COGS). Gross income is just one type of income; other types of income are operating income, pre-tax income or net inco
http://www.investingforbeginners.eu/gross_income
Gross Margin
Gross margin is profitability percentage that shows the ratio between gross income and revenue. Gross margin is usually calculated when there is a need to compare company’s competiveness and effectiveness i
http://www.investingforbeginners.eu/gross_margin
Operating Income
Operating income (operating profit) is the type of company’s profit that comes from operating activity. That means operating profit is lower than gross income by operating expenses but higher than pre-tax p
http://www.investingforbeginners.eu/operating_income
Operating Margin
Operating margin is a profitability percentage that shows what company’s profit margin is before it pays interests and taxes. Operating margin simply ignores capital structure (because ignores financial act
http://www.investingforbeginners.eu/operating_margin
EBIT
EBIT (also called Earnings Before Interest and Taxes) is a financial indicator of the company that provides information about company’s profitability while ignoring the impact of capital structure and corpo
http://www.investingforbeginners.eu/ebit
Cash Flow Coverage Ratio
Cash flow coverage ratio measures company’s ability to repay its debt. This ratio compares operating cash flow of the company to its debts. If ratio is low (lower than 0.2), it may indicate potential
http://www.investingforbeginners.eu/cash_flow_coverage_ratio
Financial Forecasting
Financial forecasting is a part of financial planning and also a part of a DCF valuation. But usually financial planning covers only a period of year or two while financial forecasting regularly covers about five
http://www.investingforbeginners.eu/financial_forecasting
Strategic Financial Planning
Strategic financial planning is a bit different from standard financial planning because standard financial planning focuses on a budget which is detailed estimation of financial statements when strategic financi
http://www.investingforbeginners.eu/strategic_financial_planning
Minority Interest
Minority interest (non-controlling interest) is a part of net income or of an equity that does not belong to the shareholders of the main group. Basically there are two types of the minority interest:
http://www.investingforbeginners.eu/minority_interest
Operating Cash Flow
Operating cash flow or ‘cash flow from operations’ (CFFO) is one of the most important among financial indicators and is used to measure company’s results in cash terms. While net income or oper
http://www.investingforbeginners.eu/operating_cash_flow
Return on Capital Employed
Return on capital employed ratio (ROCE) measures company’s return compared to its employed capital. Return in this case is some kind of profit (mostly EBIT or NOPAT) and the capital employed means equity ca
http://www.investingforbeginners.eu/return_on_capital_employed
Net Interest Margin
Net interest margin shows the profitability of the lending business for a bank or other financial institution. Lending business is the core business for most of the banks, and the profitability of this operational segmen
http://www.investingforbeginners.eu/net_interest_margin
