Tag: Profit

Return On Capital Employed (ROCE)

What is Return On Capital Employed (ROCE) Return on capital employed (ROCE) is a financial ratio that measures a company’s profitability and the efficiency with which its capital is employed. ROCE is calculated as: ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed Return On Capital Employed – ROCE Components of Return On […]

Short Selling

What is Short Selling Short selling is the sale of a security that the seller has borrowed. A short seller profits if a security’s price declines. In other words, the trader sells to open the position and expects to buy it back later at a lower price and will keep the difference as a gain. […]

14 Dec

Nonconvertible debentures versus fixed deposits

Debentures and fixed deposits are two different ways of investing money through financial instruments. A debenture is an unsecured bond. Essentially, it is a bond that is not backed by a physical asset or collateral. Meanwhile, a fixed deposit is an arrangement with a bank where a depositor places money in the bank and is […]

Active Trading

What is ‘Active Trading’ Active trading refers to buying and selling securities for quick profit based on short-term movements in price. BREAKING DOWN ‘Active Trading’ Active trading seeks profit from price movements in highly liquid markets. For this reason, active traders generally focus on volatile stocks, foreign currency trades, or derivatives. Active trading requires a more […]

Cash Settlement

What is a ‘Cash Settlement’ A cash settlement is a settlement method used in certain futures and options contracts where, upon expiration or exercise, the seller of the financial instrument does not deliver the actual (physical) underlying asset but instead transfers the associated cash position. For sellers not wishing to take actual possession of the […]

Tactical Trading

What is ‘Tactical Trading’ Tactical trading is a style of investing for the relatively short term based on anticipated market trends. Tactical trading involves taking long or short positions in a range of markets, from equities and fixed income to commodities and currencies. Diversified long-term portfolios will often include a tactical trading overlay, which involves allocating part […]

Earnings Season

What is ‘Earnings Season’ Earnings season refers to the months of the year during which most quarterly corporate earnings are released to the public. Earnings season generally occurs in the months immediately following the end of each fiscal quarter. This means that earnings seasons fall in January, April, July and October. These lagging dates are […]

Profitability Ratios

What are ‘Profitability Ratios’ Profitability ratios are a class of financial metrics that are used to assess a business’s ability to generate earnings relative to its associated expenses. For most of these ratios, having a higher value relative to a competitor’s ratio or relative to the same ratio from a previous period indicates that the […]

Earnings Per Share – EPS

What is ‘Earnings Per Share – EPS’ Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company’s profitability. EPS is calculated as: EPS = (Net Income – Dividends on Preferred Stock) / Average Outstanding Shares How […]