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Investing in Gold (II)
The upper limit of the price is even more difficult. In our times gold is not founded in streams as was shown in the movies. Now gold is mined from the deep earth and separated from gold dust, metal ore or rock. In natur
http://www.investingforbeginners.eu/investing_in_gold_ii-p0-i5
Investing in Land - Agricultural REITs
Investing in land I have noticed an increased interest in agricultural land investments during the last period. And I can it understand completely. When stocks are so volatile and bonds may offer such low RETURN
http://www.investingforbeginners.eu/investing_in_land_agricultural_reits-p0-i12
Stocks Riskier than Bonds?
It is so common that stocks are riskier investments than bonds; nobody is even considering this question. Would I doubt it? Of course not, stocks are stocks and bonds are bonds. But I would like to look at it fro
http://www.investingforbeginners.eu/stocks_riskier_than_bonds-p0-i15
European Dividend Stocks
Before getting to the exact stocks, at first, please let me explain why I have chosen European dividend stocks as a topic. For the beginning, lets solve the question why dividend stocks. The true is that many inv
http://www.investingforbeginners.eu/european_dividend_stocks-p0-i22
What means long term in investing?
When I talk to non-professional investors, I often get surprised on their interpretation of ‘long-term investment’. Of course, everyone wants to enjoy their lives and to do it fast, while not many are ready t
http://www.investingforbeginners.eu/what_means_long_term_in_investing-p0-i23
Learning the basic investment concept: a good start in investing
The first step in investing is learning the investment concept itself. It is very important that you understand the basic rules in investing in order for your investment to profit and to prevent losses. As we all know,
http://www.investingforbeginners.eu/learning_the_basic_investment_concept_a_good_start_in_investing-p0-i28
How Oil Price Influence Investment Markets?
After Saudi and Russia decisions to increase supply oil has smashed to the unseen levels. But, what's next? Everything revolves around oil and it's inevitable that the fluctuations in the oil industry will
http://www.investingforbeginners.eu/how_oil_price_influence_investment_markets-p0-i31
How Investment Horizon Affects Your Investment Portfolio?
All investors have an investment horizon, which is the amount of time that they're willing to keep their money on the market. In layman's terms, it measures how long one is willing to wait before selling one's securiti
http://www.investingforbeginners.eu/how_investment_horizon_affects_your_investment_portfolio-p0-i32
Investments
(Are you looking for investment definition?) Investments are instruments that allow us to receive a higher amount of money than was spent. If someone spends 10 euros or dollars and he knows that he will receive
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Investing
Investing - what is that exactly? Probably you have heard many different definitions of investing. However, what is the essence of it? The essence is very simple: investing - a present sacrifice for the future.If
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Sortino Ratio
Sortino ratio is a financial ratio that is used to measure the performance of investment portfolio and is very similar to a Sharpe ratio. The main difference between Sortino ratio and Sharpe ratio is that Sharpe
http://www.investingforbeginners.eu/sortino_ratio
Investment in Stocks
Stocks (shares) are investments that attract the most attention in financial markets, and perhaps stocks are worth it, because investors can expect the highest RETURN from stocks among the range of traditional investme
http://www.investingforbeginners.eu/investment_in_stocks
Investing for Beginners
Investing can seem a hard thing to do for beginners. But investing for beginners isn‘t any harder than other things in the beginning. Many processes can look difficult until you don‘t know what is hid
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Investing for Retirement
Investing for retirement may be one of the most reasonable investment objectives. Sometimes, people invest so they can afford expensive things that they otherwise could not afford without investing. For example
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Investment in Bonds
Debt (fixed income) securities Bonds are fixed income securities and the principle of them is simple - the issuer of the bonds attracts the money from the investors and commits to pay back for the investors until end of
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Investment in Cash
Bank (saving) Accounts, Deposits, Deposit Certificates, Treasure Bills, Money Market Funds When we are talking about investment, cash is not only the real paper (or metal) money that are held in the wallet or under the
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Investment in Mutual Funds
Investment Funds (Collective Investment) Investment in mutual funds is one of the most popular types of investment. A mutual fund is just a large and well diversified investment portfolio of many securities, in which ca
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Investment in Commodities
Investment in Oil, gold, Silver, Copper, Wheat Commodities (raw materials) are indeed a tangible asset class, but it can be also assigned to financial investments, because in current days most investments in commo
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Asset Management
Definition Asset management which also is called as investment management has many similarities to finance management but investment management is more specific and narrow area of finance. Invest
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Investment in Collectibles
Many kinds of collectibles may also be considered as investments, but their value and benefits are much more elusive, than more serious traditional investment instruments. Works of art, stamps, antiques, coins,
http://www.investingforbeginners.eu/investment_in_collectibles
Direct Investment
Investment in Tangible Assets Direct investment are very wide issue to study, but it‘s not so close to traditional investing. Direct investments are more related with business development and would depend
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Investment in Actively-Managed Funds
Active Mutual (Investment) Funds Actively managed investment funds usually are those mutual funds that choose not copy the index (benchmark), but is trying to beat it, so could give for investing person a higher RETURN,
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Strategy Investment
Strategy investment refers to an investment strategy, which should be wise chosen according to investing person character and market environment. Investing always has to be strategic and foresee possible future e
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Investment Strategy in Growth Stocks
Investing in the rapidly growing companies has always attracted the attention of all worlds’ investors, in particular, at the market rise. The reason why investing in growth stocks - so popular is very simp
http://www.investingforbeginners.eu/investment_strategy_in_growth_stocks
Market Timing at Investing
Investing During Change of Economic Cycles - Market Timing Investment Strategy Market timing is capturing of investment price movements "waves" trying to sell high and buy cheap. Simple as that. Still it onl
http://www.investingforbeginners.eu/market_timing_at_investing
Investment Objectives for Beginners
The full investment objectives for beginners are very individual parameters. They were already mentioned briefly in article about benefits of investment. However, the basic investment objective is one - to make capital w
http://www.investingforbeginners.eu/investment_objectives_for_beginners
Investment Manager
Investment management or finance management are particularly a lot of attention and responsibility requiring areas. It does not matter whether you manage your money whether corporate funds, in any case, it is important t
http://www.investingforbeginners.eu/investment_manager
Investment Strategy by Age
It is very popular to allocate asset classes in investment portfolio according to investor’s age. And it has some reasonable justification: when investor’s age is changing – his risk tolerance a
http://www.investingforbeginners.eu/investment_strategy_by_age
Investment Securities
Investment securities may have different understandings as a term, but most commonly investment securities are securities held on investment purpose to get a RETURN from invested capital over mid-long term.
http://www.investingforbeginners.eu/investment_securities
Investments in Ultra ETF
Ultra ETF by most characteristics is similar to normal ETF but there is one main difference: if Ultra ETF follows the same index as normal ETF does, it makes it twice. For example, if normal ETF follows index tha
http://www.investingforbeginners.eu/investments_in_ultra_etf
Investment in Short ETF
Investment in Short ETF is very different from regular investing. “Short” – means short selling transactions when securities are loaned and sold with obligation to RETURN it after some pre-agree
http://www.investingforbeginners.eu/investment_in_short_etf
Investment in Ultra Short ETF
Investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed b
http://www.investingforbeginners.eu/investment_in_ultra_short_etf
Investment Definition
Investment definition may have two meanings: 1) An investment as a process (investing) when tangible or financial assets are acquired on purpose to earn more money (or other material benefits) than was s
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Investment Techniques
Investment techniques are some combination of investment strategies and investment tactics. Investment techniques usually are middle term oriented procedures that help to reach some predetermined result. It may i
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Investment Decision
An investment decision is a choice made by investor or investment manager trying to maximize the RETURN and minimize the risk. The every decision maker tries to make the best choice for him, the same time better
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Bear Market
A bear market is a market trend when investment market is decreasing over longer period and is believed to decrease in the future. Bear market is a well known term in the investment world and is opposite to bull
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Investor
An investor is an individual or corporate unit that invests in any class of investments on purpose to earn some RETURN from invested capital. There may be more criteria to distinguish very small investments
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Share Investor
A share investor is an investor who invests in shares (stocks) but not the other investments. If investor invests in different asset classes he is a regular investor. If investor is specializing in shares he must
http://www.investingforbeginners.eu/share_investor
Book Value of Share
A book value of share is calculated dividing all company’s book value (less preferred equity) by its common share number. For example, if company’s book value is 1,000,000 USD and issued share nu
http://www.investingforbeginners.eu/book_value_of_share
Dividends
Dividends are capital payments from companies to theirs shareholders. Normally dividends are paid by cash and usually but necessary once a year. Every company’s common share of the same class gets equal div
http://www.investingforbeginners.eu/dividends
Dividend Yield
A dividend yield is a ratio that shows how much investor gets dividends from the stock compared to its price. It is calculated dividing dividend per share by the share price. Dividend yield is impo
http://www.investingforbeginners.eu/dividend_yield
Investment Tactics
Investment tactics are the rules for investment actions that help to react on market conditions and achieve more efficient results. Investment tactics deal with lower scale questions than investment strategy, whi
http://www.investingforbeginners.eu/investment_tactics
Investment Portfolio
An investment portfolio is a composition of different investments made on purpose to achieve the highest RETURN at predetermined risk level. Investment portfolio can include all kinds of investments: stocks,
http://www.investingforbeginners.eu/investment_portfolio
Diversified Investments
Diversified investments are investments that are well diversified, which should include regional diversification, allocation between asset classes, sectors, maturity, denomination of currencies and other characte
http://www.investingforbeginners.eu/diversified_investments
Buying on Margin
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? Buying on margin gets popularity during every strong bull market. Unfortunately, it be
http://www.investingforbeginners.eu/buying_on_margin
Diversification
A diversification is an investment technique or a part of an investment strategy, which is used to reduce the investment risk of the portfolio, including in it larger number of different securities or other inves
http://www.investingforbeginners.eu/diversification
Fair Investment
Fair investment mostly refers to a term true investment used by Benjamin Graham. Also there are companies that use fair investment term in its name. Fair investment words give an impression, that clients will be
http://www.investingforbeginners.eu/fair_investment
Venture Capital
A venture capital is a capital provided by capital investment groups or private equity funds for small start up businesses. There are not many opportunities for young fast growing companies. If they
http://www.investingforbeginners.eu/venture_capital
Private Equity Fund
A private equity fund is a fund that invests in a stakes of non-listed companies (private equity). Investment in private equity funds is much different from investment in mutual funds. They are illiquid, riskier
http://www.investingforbeginners.eu/private_equity_fund
Small Cap Stocks
Small cap stocks are stocks of lower market capitalization. All stocks may be classified to large cap, mid cap and small cap (if ignoring mega, nano and other modern classification caps). There is no united class
http://www.investingforbeginners.eu/small_cap_stocks
Hedge (Hedging)
Hedge (hedging) is protection of investment portfolio against fluctuations using financial instruments. Hedge is very popular at investment theory, but not so popular at investment practice. In theory everything
http://www.investingforbeginners.eu/hedge_hedging
Primary Markets
Primary markets are the markets, in which new capital investments are raised. The perfect example of primary market is an IPO, but even if it is not the first issue of securities for the company, it still counts
http://www.investingforbeginners.eu/primary_markets
Risk-Free Interest Rate
A risk-free interest rate is rate of interests that would be paid by fixed income securities that contains no risk at all. For a very long time short-term US Treasury securities was used to d
http://www.investingforbeginners.eu/riskfree_interest_rate
Junk Bonds
Junk bonds are bonds that have a speculative-grade credit rating, which is BB or lower. Junk bonds are riskier but they have higher yields. The spread between junk bond yield and safe bond yield (c
http://www.investingforbeginners.eu/junk_bonds
Penny Stocks
Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc
http://www.investingforbeginners.eu/penny_stocks
Investment Consultant
An investment consultant is a job position in financial companies. Main functions of investment consultant: Help private investors to make a proper investment strategy according to investors risk tolerance. A
http://www.investingforbeginners.eu/investment_consultant
Diversifiable Risk
A diversifiable risk is the risk that can be reduced by increasing number of investments in the investment portfolio. For example, company’s risk can easy diversifiable by choosing more companies. Even coun
http://www.investingforbeginners.eu/diversifiable_risk
Internal Rate of RETURN (IRR)
Internal rate of RETURN
http://www.investingforbeginners.eu/internal_rate_of_return_irr
Net Present Value (NPV)
Net present value (NPV) is a value calculated by discounting all future net cash flows (net cash flow is calculated taking all the forecasted future income and subtracting from them forecasted expenses in every p
http://www.investingforbeginners.eu/net_present_value_npv
Corporate Finance
Corporate finance is a niche of finance that deals with financial questions related to corporations. The main goal of every company should be stockholders wealth maximization, but to achieve that m
http://www.investingforbeginners.eu/corporate_finance
Investment Growth
An investment growth may have two different meanings: Most probable it refers to growth investing. It is an investment strategy or part of it, which concentrates on investments in stocks that grow faster than
http://www.investingforbeginners.eu/investment_growth
INVESTMENT MANAGEMENT HOW TO MANAGE YOURS INVESTMENTS PROPERLY
Investment management is a complete science and if you are expecting to become a professional investment manager in few hours you should get disappointed. However, there are several most important guidelines at i
http://www.investingforbeginners.eu/investment_management_how_to_manage_yours_investments_properly
Investment Performance Measurement
Many investors are happy about investment managers until the stock market is growing, but when the decline starts investment managers gets only the worst words about their job. However, this is wrong attitud
http://www.investingforbeginners.eu/investment_performance_measurement
Treynor Ratio
Treynor ratio is another popular ratio that is used to measure the performance of investment portfolio. This ratio compares the excess RETURN (above risk free RETURN) of a portfolio to beta of that portfolio. Whi
http://www.investingforbeginners.eu/treynor_ratio
Jensens Alpha
Jensen’s alpha is used to measure the performance of an investment portfolio. The higher ratio means better performance of portfolio manager. Basically, this Jensen’s ratio shows the above market port
http://www.investingforbeginners.eu/jensens_alpha
Sharpe Ratio
Sharpe ratio measures the above risk free performance of investment portfolio in relation to its risk. This ratio was developed by William F. Sharpe which introduced the ratio in 1966. Now Sharpe ratio is the mos
http://www.investingforbeginners.eu/sharpe_ratio
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
Investment Finance
Investment finance is finance that is related to investment. Investment market is a part of financial market, so we can say that investment is a part of finance. Investment finance specializes on f
http://www.investingforbeginners.eu/investment_finance
Inflation
Inflation is a percent that reflects a price increase of goods and services portfolio. When inflation occurs, money is losing its purchasing power. For example, if inflation would keep at 8% for 9 years (it would
http://www.investingforbeginners.eu/inflation
Deflation
Deflation is a process opposite to inflation and occurs when inflation is negative. Deflation means that prices of goods and services are decreasing. Such situation when prices are decreasing is not very common i
http://www.investingforbeginners.eu/deflation
P/B Ratio
P/B (P/Bv or price-to-book) ratio shows how expensive stock is compared to its books value. Company’s book value (also called equity, capital, shareholders funds etc.) is equal to company’s total assets les
http://www.investingforbeginners.eu/p_b_ratio
EV/S Ratio
Enterprise Value to Sales Ratio EV/S ratio shows how expensive firm is compared to its sales. This multiple is important when company is unprofitable or profits margins are very low and turnaround is expected in
http://www.investingforbeginners.eu/ev_s_ratio
Cost of Equity
Cost of equity is the rate of RETURN that is required by equity owners from their investment. Of course, requirements of the shareholders have to be real and meet market conditions as well. Basically cost of equi
http://www.investingforbeginners.eu/cost_of_equity
Stock Valuation
Stock valuation is very important part of investing in stocks, and this part is the most time consuming and knowledge requiring. Stock valuation is a necessary and main step at stock picking process. The only way
http://www.investingforbeginners.eu/stock_valuation
DCF Valuation
Discounted Cash Flow Analysis DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t
http://www.investingforbeginners.eu/dcf_valuation
Power of Compounding
Power of compounding (compound interest) is a known description for fast increase in value when investment brings steady interests and interests are reinvested. The principle of the growth is the geometric progre
http://www.investingforbeginners.eu/power_of_compounding
WACC
WACC (Weighted Average Capital Cost) shows cost of capital when capital is consisted of both equity and debt capital. So WACC simply calculates the weighted average between equity cost and debt cost.
http://www.investingforbeginners.eu/wacc
CAPM
CAPM (Capital Asset Pricing Model) is method widely used for equity cost calculation. Equity cost should show the RETURN that investor should expect/seek from an investment that contains specific level of risk.&n
http://www.investingforbeginners.eu/capm
Hedge Funds
Hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu
http://www.investingforbeginners.eu/hedge_funds
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
The Pros and Cons of Buying on Margin
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth? The opportunity provided by buying on margin i
http://www.investingforbeginners.eu/the_pros_and_cons_of_buying_on_margin
Costs of Buying Stocks on Margin
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? We won’t talk about the possible losses in here. The goal of this paragraph is t
http://www.investingforbeginners.eu/costs_of_buying_stocks_on_margin
Financial Investment
Financial investment is any financial asset that should provide a RETURN for investor. Financial asset is an asset that doesn’t have tangible form and has some financial obligations to its owner. All securi
http://www.investingforbeginners.eu/financial_investment
Organic Growth
An organic growth is a growth of the company when inner resources are used to get larger market share. Also organic growth may be achieved together with growth of the whole market segment or entering new markets
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Risk Tolerance
Risk tolerance is a characteristic that describes the investor and his ability to withstand losses from investments. The higher risk tolerance of investor the more losses he/she may handle. Investm
http://www.investingforbeginners.eu/risk_tolerance
Risk Averse
Risk averse is a characteristic of an investor who is avoiding risk. The more investor is avoiding the risk the more is he risk averse. Almost all the investors (as people are too) are more or less risk averse an
http://www.investingforbeginners.eu/risk_averse
Growth Funds
Growth funds are investment (mutual) funds that concentrate on investing in stocks of fast growing companies. Growth funds can be passively managed or actively-managed funds but all growth funds are riskier than
http://www.investingforbeginners.eu/growth_funds
High RETURN Investments
High-RETURN investments (or high-yield investments) are investments that can provide the higher RETURN than average investments, and of course such investments are riskier. The reality is that people have differe
http://www.investingforbeginners.eu/high_return_investments
Best Investments
Best investments are always wanted, but the reality is that there are no best investments for everyone. And if such investment would exist then those investments would become an investment bubble and would not st
http://www.investingforbeginners.eu/best_investments
Real Estate Investors
Real estate investors are individuals or investment companies that are investing in real estate (property). There few main types of real estate investors: • Real estate developers are investors that
http://www.investingforbeginners.eu/real_estate_investors
Private Equity Investor
Private equity investor is a corporation or individual that is investing in stakes of unlisted companies. The only different between equity investor and private equity investor is that the last one invests in unl
http://www.investingforbeginners.eu/private_equity_investor
Small Business Investors
Small business investors are private investors or business investors that are investing in to small businesses. Small businesses are also in need for capital and the best source for that capital might a bank beca
http://www.investingforbeginners.eu/small_business_investors
Angel Investors
Angel investors are investors that have capital for investments and are investing in young companies that are in start-up stage and are needed for capital to exploit growth potential. The source of funding from a
http://www.investingforbeginners.eu/angel_investors
Finding Investors
Finding investors might be a hard task if you have no required knowledge for that. Most probably you are looking some business investors or angel investors that would invest in to your business. And the success o
http://www.investingforbeginners.eu/finding_investors
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
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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
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
Financial Analysis
Financial analysis is an important part of investing, especially if investor wants better results from his investments. Of course it is possible to ignore financial analysis and make investment decisions based on
http://www.investingforbeginners.eu/financial_analysis
Profitability Analysis
The main purpose of profitability analysis is to determine the profit margin and compare it to the appropriate financial data. Profitability should not be confused with RETURN because profitability is based on so
http://www.investingforbeginners.eu/profitability_analysis
RETURN
RETURN analysis is different from profitability analysis because usually RETURN is measured as a profitability of the assets, investments, capital or other similar asset group but not as a profitability of the re
http://www.investingforbeginners.eu/return
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
Asset Turnover Ratio
Asset turnover ratio compares company’s sales and assets in order to identify the efficiency of assets used in the business. In simple words, it shows show much of sales are generated by company’s ass
http://www.investingforbeginners.eu/asset_turnover_ratio
Investment Philosophy
Investment philosophy must include the main rules of the investment management process. It is a type of approach in which investor is tend to believe. Many investors believe in different things and have different
http://www.investingforbeginners.eu/investment_philosophy
Asset Performance
Asset performance is a RETURN of an asset over some period. Usually performance is measured on annual basis. But basically performance of any asset depends on its riskiness and the period (most of the stocks and
http://www.investingforbeginners.eu/asset_performance
Cost of Capital
Capital of every company consists of two parts: equity capital and debt capital (only if company has no financial debts it has only equity capital). Both these capital sources have their costs and this is cost of
http://www.investingforbeginners.eu/cost_of_capital
Beta
What is beta? Beta is a ratio that measures volatility of an investment in relation to the whole market. In other words, it shows how the price of stock was changing compared to the whole market. Theoretically,
http://www.investingforbeginners.eu/beta
Volatility
What is volatility? Volatility definition can be short: volatility is the size of the amplitude in investment’s value changes over time. In simple words, it describes the riskiness of the security because
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NOPAT
NOPAT (‘net operating profit after tax’ or ‘after tax operating profit’) is equal to operating profit less taxes. It is adjusted by tax rate because the part cost of debt which is part of
http://www.investingforbeginners.eu/nopat
Rate of RETURN
A rate of RETURN is a percentage that shows what is the profit or loss gained on some investment on annual basis. There are many ways to calculate the rate of RETURN including internal rate of RETURN, arithmetica
http://www.investingforbeginners.eu/rate_of_return
RETURN on Invested Capital
RETURN on invested capital (ROIC) or also called RETURN on capital is a financial ratio employed to measure nominal company’s RETURN that is earned by capital invested in operating asset. Basically RETURN o
http://www.investingforbeginners.eu/return_on_invested_capital
CFROI
CFROI or cash flow RETURN on investment is a rate of RETURN that measures the performance of corporation based on its cash flow generation ability. CFROI is not very popular but is still used by some companies an
http://www.investingforbeginners.eu/cfroi
Financial Ratios
Financial ratios are ratios that are used in financial analysis or in other words that are using financial data of a company. Such financial data usually is found in financial statements (income statement, balanc
http://www.investingforbeginners.eu/financial_ratios
Fixed Asset Turnover
Fixed asset turnover ratio is a financial ratio that measures how much of sales are created by company’s property, plant and equipment. The ‘higher asset turnover’ is the better, because it mean
http://www.investingforbeginners.eu/fixed_asset_turnover
Capital Employed
Capital employed is a value of capital investments in a company. Basically, the capital of each company can be classified in these types of capital: Equity capital Debt capital Working capital
http://www.investingforbeginners.eu/capital_employed
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
Total Debt Ratio
Total debt ratio compares total liabilities to total assets. The higher ratio represents riskier situation. And if this ratio is equal to 1.0, it would mean that liabilities are equal to assets or in other words
http://www.investingforbeginners.eu/total_debt_ratio
CAGR Formula
CAGR formula is used to calculate 'compound annual growth rate': CAGR = (Value at the end / Value at the beginning) ^ (1 / Years) - 1 * Can be multiplied by 100%. Where: Value at t
http://www.investingforbeginners.eu/cagr_formula
CAGR
CAGR is used to measure RETURN and means compound annual growth rate. This type of RETURN measurement is very popular in investment finance because interest also earns interest and power of compounding cannot be
http://www.investingforbeginners.eu/cagr
Market Risk Premium
(Equity Risk Premium) Every investment carries some level of risk and some level of potential RETURN. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq
http://www.investingforbeginners.eu/market_risk_premium
Load Fee
'Load fee' is a fee that is paid during the selling process of the mutual fund. The sales load fee is also called as sales fee or distribution fee because normally it is paid by investor during sales-distribution
http://www.investingforbeginners.eu/load_fee
Internal Rate of RETURN
An internal rate of RETURN (IRR) is a ratio used very often to measure a profitability of some investment project. IRR is determined as a discount rate when NPV of the project is equal to zero. If IRR is higher t
http://www.investingforbeginners.eu/internal_rate_of_return
