Autocorrelation is the correlation between a given time series and a lagged version of itself. In other words, it is the degree to which a time series is linearly related to itself over time. There are a number of ways to measure autocorrelation. The most common is the Pearson correlation coefficient, which measures the linear … Read more
The Expanded Accounting Equation is a tool used in Fundamental Analysis to help forecast a company’s future financial performance. The equation is used to measure a company’s financial health by taking into account all of its liabilities and assets, both current and long-term. The equation is also used to calculate a company’s equity and to … Read more
Net current asset value per share (NCAVPS) is a metric used by some investors to help identify undervalued companies. It is calculated by subtracting a company’s total liabilities from its current assets and then dividing by the number of shares outstanding. The thinking behind this metric is that a company with a high NCAVPS is … Read more
Market Efficiency: Differing Opinions and Examples What is market inefficiency example? A market inefficiency is when the market price of a security does not perfectly reflect all available information about that security. This can happen for a variety of reasons, but some common examples include: -Lack of information: If there is limited information available about … Read more
What is Stockholders’ Equity? Stockholders’ equity is the portion of a company’s assets that belongs to the shareholders. It can be calculated by subtracting the company’s liabilities from its assets. Examples of Stockholders’ Equity Some examples of items that would be included in stockholders’ equity are common stock, paid-in capital, and retained earnings. Do shareholders … Read more
A capital reserve is a portion of a company’s earnings that is set aside for future use. The funds in a capital reserve can be used to finance expansion, pay dividends, or repurchase shares. A company may also use its capital reserve to make acquisitions or to fund research and development. What is reserve capital … Read more
Normalized earnings is a term used to describe a company’s earnings that have been adjusted to remove the effects of one-time or non-recurring items. This gives investors a more accurate picture of a company’s true earnings power. What is normalized FCF? Normalized FCF is a measure of a company’s free cash flow that has been … Read more
Stock analysis is the process of evaluating a company’s stock to determine its suitability for investment. The analysis typically includes an assessment of the company’s financial statements, as well as an analysis of its business model and competitive advantages. There are a number of different approaches that can be taken when conducting stock analysis, but … Read more
Markov analysis is a tool used by financial analysts to predict future prices of assets based on past price movements. The technique is named after Andrey Markov, a Russian mathematician who developed the theory behind it. Markov analysis is based on the assumption that future price movements of an asset will be based on its … Read more
Financial performance refers to how well a company uses its financial resources to generate profits and grow its business. Why financial performance analysis is important? Financial performance analysis is important for a variety of reasons. It can help investors evaluate a company’s overall financial health, identify trends and assess future risks. It can also provide … Read more
