What price-to-earnings ratio is average in the utilities sector?

July 9, 2024 No Comments

A: As of December, 2014, the average price-to-earnings (P/E) ratio for the utilities sector is approximately 23, which is considerably well below the overall market average P/E of 70. The forward P/E, based on projected earnings for utility companies, is 18 for the general utilities

What is the formula for calculating the price-to-earnings (P/E) ratio in Excel?

July 9, 2024 No Comments

A: The price-to-earnings ratio, or P/E ratio, is a valuation ratio used in fundamental analysis. The ratio compares a company’s market price per share to its earnings per share, or EPS. To calculate a company’s P/E ratio, simply divide its market price per share by

What is the formula for calculating working capital in Excel?

July 9, 2024 No Comments

A: Working capital is used in fundamental analysis to determine a company’s financial health and efficiency in the short-term. A company’s working capital is calculated by subtracting its current liabilities from its current assets. Explaining the Working Capital Formula in Excel To compare the efficiency

What is the most typical holding in an SPV?

July 9, 2024 No Comments

A: Special Purpose Vehicles, or SPVs, have been extensively used as a means of securitizing property-based assets. Since the 1980s, large financing corporations have come to rely on SPVs and similar products to spread risk and move liabilities off of their balance sheets. The Great

What is the relationship between accumulated depreciation and depreciation expense?

July 9, 2024 No Comments

A: Accumulated depreciation is the total amount a company depreciates its assets, and depreciation expense is the amount a company’s assets are depreciated for a single period. Essentially, accumulated depreciation is the total amount of a company’s cost that has been allocated to depreciation expense

What is the relationship between marginal revenue and total revenue?

July 9, 2024 No Comments

A: Total revenue is the amount of total sales of goods and services. It is calculated by multiplying the amount of goods and services sold by the price of the goods and services. Marginal revenue is directly related to total revenue because it measures the

What is the role of agency theory in corporate governance?

July 9, 2024 No Comments

A: Agency theory is used to understand the relationships between agents and principals. The agent represents the principal in a particular business transaction and is expected to represent the best interests of the principal without regard for self-interest. The different interests of principals and agents

What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?

July 9, 2024 No Comments

A: The parametric method, also known as the variance-covariance method, is a risk management technique for calculating the value at risk of a portfolio of assets. The value at risk is a statistical risk management technique measuring the maximum loss that an investment portfolio is

What is the weighted average of outstanding shares? How is it calculated?

July 9, 2024 No Comments

A: The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring existing shares, and other financial instruments such as employee options being converted into shares. The weighted average of outstanding shares is a calculation

What is the Zig Zag Indicator formula and how is it calculated?

July 9, 2024 No Comments

A: The zig zag indicator is a basic tool that analysts use to find out when a security’s trend is reversing. By determining the support and resistance areas, it helps to identify significant changes in price while filtering out short-term fluctuations, thus eliminating the noise

All Rights Reserved