Net-net is a term used in finance to describe a company’s net current assets minus its total liabilities. The net-net method is used to value a company’s equity by taking into account only its most liquid assets and its liabilities. The calculation is performed by taking a company’s total current assets and subtracting its total … Read more
The tangible book value per share (TBVPS) is a measure of a company’s book value that excludes intangible assets such as goodwill. Goodwill is an intangible asset that is created when one company acquires another company at a price that is higher than the fair market value of the acquired company’s assets. The TBVPS can … Read more
A manifest variable is a type of latent variable that is used to predict another variable. Manifest variables are also sometimes called predictor variables or independent variables. What is the purpose of confirmatory factor analysis? Confirmatory factor analysis is a statistical technique used to assess the fit between a proposed model of relationships between variables … Read more
How to Calculate Fair Value: Formula and Examples What is the difference between cost model and fair value model? The cost model and fair value model are two common valuation models used to estimate the value of a company or asset. The cost model estimates the value of an asset based on the historical cost … Read more
Funds transfer pricing (FTP) is the process of setting the price for transfers of funds between different legal entities within a company. The price is set in order to reflect the true cost of the funds transfer and to ensure that the entities involved do not unfairly benefit or suffer from the transfer. FTP analysis … Read more
Qualitative analysis is a securities analysis discipline employed to evaluate a security by making observations about it, rather than using numerical measures. Qualitative analysts seek to understand the reasons behind movements in a security’s price, rather than simply focusing on the security’s price movements themselves. Some of the factors that qualitative analysts might look at … Read more
Price-Growth Flow is a tool used in fundamental analysis that measures the relationship between a security’s price and its earnings growth. The goal of this analysis is to identify stocks that are undervalued based on their earnings growth potential. To calculate price-growth flow, you first need to find a security’s price-to-earnings ratio (P/E). This is … Read more
A tear sheet is a document that provides detailed information about a security, typically including data on price, trading volume, and recent performance. Tear sheets are used by investors and analysts to evaluate securities and make investment decisions. Tear sheets typically include a security’s price chart, which can be used to identify trends and patterns. … Read more
The weighted average loan age (WALA) is a measure of the average age of a bank’s loan portfolio. The weighted average is calculated by weighting each loan by its outstanding balance. The WALA is important because it provides insight into the average credit risk of a bank’s loan portfolio. A higher WALA indicates a greater … Read more
How to Calculate Free Cash Flow Yield Free cash flow yield is a financial metric that measures the cash flow available to shareholders after all expenses have been paid. It is a ratio of free cash flow to the market value of the company’s shares. To calculate free cash flow yield, you will need to … Read more
