What is a “non linear” exposure in Value at Risk (VaR)?

July 7, 2024 No Comments

A: The value at risk (VaR) is a statistical risk management technique that determines the amount of financial risk associated with a portfolio. There are generally two types of risk exposures in a portfolio: linear or nonlinear. A portfolio that contains a significant amount of

What is a back door listing?

July 7, 2024 No Comments

A: A back door listing, sometimes referred to as a reverse takeover, reverse merger, or reverse initial public offering (IPO), occurs when a privately held company that may not qualify for the public offering process purchases a publicly traded company. By undertaking a back door

What does a negative correlation coefficient mean?

July 7, 2024 No Comments

A: A negative correlation coefficient means that, for any two variables X and Y, an increase in X is associated with a decrease in Y. A negative correlation demonstrates a connection between two variables in the same way a positive correlation coefficient does, and the

What does financial accounting focus on?

July 7, 2024 No Comments

A: The focus of financial accounting is on summarizing and reporting a business’s financial position to entities outside the business with a vested interest, such as stockholders, creditors, government agencies and suppliers. The counterpoint to financial accounting is managerial accounting, which provides information to those

What does it mean to be “above water”?

July 7, 2024 No Comments

A: The term “above water” is used to describe any situation in which the ending or current value of a subject is higher than its beginning or opening price. In accounting, an asset with a value that has appreciated is said to be “above water”

What does it mean to capitalize accrued interest?

July 7, 2024 No Comments

A: When a company capitalizes accrued interest, it adds up the total amount of interest owed since the last debt payment made and adds the amount to the cost of the long-term asset or loan balance. There are two components to capitalizing accrued interest: Accrued

What causes dividends per share to increase?

July 7, 2024 No Comments

A: There are two primary causes for increases in a company’s dividend per share payout. The first is simply an increase in the company’s net profits out of which dividends are paid. The second is a shift in the company’s growth strategy that leads the

What changes in working capital impact cash flow?

July 7, 2024 No Comments

A: Understanding Working Capital Working capitalrepresents the difference between a firm’s current assets and current liabilities. Working capital, also called net working capital, is the amount of money a company has available to pay its short-term expenses. Positive working capital is when a company has more current

What debt/equity ratio is common for companies in the drugs sector?

July 7, 2024 No Comments

A: The average long-term debt-to-equity (D/E) ratio common for companies in the drugs sector is 70.66 based on trailing 12-month data as of May 12, 2015. The drugs sector is composed of more specialized industries, including drug delivery, drug manufacturers – major, drug manufacturers –

What debt/equity ratio is typical for companies in the utilities sector?

July 7, 2024 No Comments

A: In the utilities sector, for companies providing general utilities such as gas and electricity, the average debt/equity ratio, or D/E ratio, is approximately 1.3. For companies primarily engaged in providing water and sewage service, the average ratio is slightly lower, approximately 1.2. Utilities carry

All Rights Reserved