Blog Posts

What Are Retained Earnings? Retained earnings are the portion of a company’s net income that is not paid out as dividends, but is instead reinvested back into the business. This can be used to finance new growth initiatives, pay down debt, or for other purposes. Retained earnings belong to the shareholders of a company, and […]

What Are Basis Points (BPS)? Basis points (BPS) refer to a unit of measurement used in finance to describe the percentage change in value of a financial instrument. One basis point is equal to 0.01 percent or 1/100th of one percent. For example, let’s say that the interest rate on a loan increases from five […]

What Is the Asset Turnover Ratio? The asset turnover ratio is a financial metric that measures the efficiency of a company’s use of its assets. The asset turnover ratio can be used to evaluate how well a company is using its assets to generate revenue. The asset turnover ratio is calculated by dividing a company’s […]

In this article you will learn what a mega backdoor Roth 401(k) conversion strategy is and how to best use it to your advantage. What Is a Mega Backdoor Roth 401(k) Conversion? A mega backdoor Roth 401(k) conversion is a strategy that allows high-income earners to make after-tax contributions to their 401(k) plan and then […]

What Is a Hostile Takeover? A hostile takeover is the acquisition of one company (the “target”) by another (the “acquirer”) where the target’s board of directors has refused the acquirer’s offer, or where the acquirer makes a tender offer that is rejected. In a hostile takeover, the acquirer tries to replace the target’s management in […]

What Is the Compound Annual Growth Rate (CAGR)? CAGR stands for Compound Annual Growth Rate and is a measure of how an investment has grown over time. It’s often used to calculate the percentage return on investments, such as stocks, bonds, mutual funds, among other assets. To calculate CAGR, you take the beginning value of […]

What Is Enterprise Value (EV)? Enterprise value is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization. EV includes both debt and equity in its calculation, giving investors and other market participants a more complete picture of a company’s worth. Enterprise value is calculated by adding […]

What Is the Coefficient of Variation (CV)? The coefficient of variation (often abbreviated CV or COV) is a statistical measure of the dispersion of data points around the mean. It is calculated as the ratio of the standard deviation to the mean, and can be expressed as a percentage. In finance, CV is important as […]

What Is Gross Margin? Gross margin is the difference between a product’s selling price and its cost of production. Gross margin is expressed as a percentage of the selling price. For example, if a company sells a product for $100 and it costs the company $90 to produce the product, the gross profit would be […]

What is Working Capital? Working capital (WC), also known as net working capital (NWC), refers to the money that a company has available to meet its short-term obligations. It is a key metric that investors use to assess a company’s financial health and its ability to continue operating and growing. Working capital is calculated by […]