Tag: investors

Hot Money

See Also: Effective Rate of Interest Calculation Fixed Interest Rate vs Floating Interest Rate Interest Rate Nominal Interest Rate Term Deposit Hot Money Definition Hot money refers to the cash that investors from foreign countries will invest during the short term in search of the highest interest rate possible. Normally, you do this through term

Read More

Homemade Leverage

Homemade Leverage Definition In finance, homemade leverage is a technique individual investors can use to synthetically adjust the leverage of a firm. To replicate the effects of leverage in the firm, the individual investor borrows money at the same borrowing rate as the company. They need to add leverage to their portfolio. If an investor invests in an

Read More

External Sources of Cash

See Also: Angel Investor Categories of Banks Commercial Paper Common Stock Convertible Debt Instrument Venture Capital External Sources of Cash In another article, I told you about Sue and generating cash from sources within her business. I will not detail her entire story at this time, but will tell you that we were successful in

Read More

Efficient Market Theory

See Also: Economic Indicators Economic Value Added Supply and Demand Elasticity Business Cycle Porters Five Forces of Competition Efficient Market Theory Efficient market theory hypothesis proposes that financial markets incorporate and reflect all known relevant information. The validity of efficient market hypothesis is debated; however, whether or not efficient market hypothesis is valid, it is useful

Read More

Economic Indicators

See Also: Consumer Price Index Stagflation Balance of Payments What are the Twin Deficits? The Feds Beige Book Economic Indicators Definition Economic indicators are macroeconomic data that describe the condition of an economy. So, use them to determine whether an economy is prosperous and expanding or troubled and contracting. For example, a high unemployment rate

Read More

Earnings per Share (EPS)

See Also: Price Earnings Growth Ratio Analysis Price Earnings Ratio Analysis Gross Profit Margin Ratio Analysis Net Profit Margin Analysis Financial Ratios Earnings per Share (EPS) Definition The earnings per share or EPS is the amount of profit that accrues to each shareholder based on their percentage ownerships or amount of shares owned within the

Read More

Dividend Yield Analysis

See Also: Dividends Dividend Payout Ratio Financial Ratios Dividend Yield Analysis Definition Dividend yield analysis indicates how much dividend a company paid to its investors relative to its stock price. Formula Dividend Yield ratio = Annual dividends per share ÷ Price per share Calculation For example a company pays annual dividend of $1 per share

Read More

Covariance

See Also: Direct Labor Variance Formulas Direct Material Variance Formulas Variance Analysis Financial Instruments Common Stock Definition Covariance Definition The covariance in finance is the degree or amount that two stocks or financial instruments move together or apart from each other. Meaning of Covariance The covariance means that investors have the opportunity to seek out

Read More

Commercial Paper

See Also: Convertible Debt Instrument NonInvestment Grade Bonds Collateralized Debt Obligations External Sources of Cash Certificate of Deposit (CD) What Your Banker Wants You To Know Commercial Bank Convertible Debt Instrument Commercial Paper Definition Commercial paper is a short-term debt instrument. Companies can borrow money by issuing it to investors. It is unsecured, meaning collateral

Read More

Carried Interests

See Also: Hedge Funds Venture Capital Current Expenditures How to Compensate Sales Staff Indirect Labor Carried Interests Definition What are carried interests? The carried interests definition is a portion of an investment fund’s annual profit that is given to the fund manager at the end of the year. Carried interests are designed to incentivize to the

Read More

Backwardation Definition

See Also: Contango Interest Rate Efficient Market Theory Market Dynamics Arbitrage Backwardation Definition Backwardation is a term used to describe a commodities market when the spot rates are higher than the future price of that certain commodity. In other words there is a downward sloping forward curve relative to the spot rate set for maturity

Read More

Angel Investor

See Also: The Dilemma of Financing a Start-up Company How to Prepare an Investor Package What is a Term Sheet Working Capital Why Venture Capital? Angel Investor Definition The angel investor definition is someone who invests in private startup companies. They often provide the first source of outside capital for a startup company. Role of an Angel

Read More