define capital output ratio
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- Formula or Equation Note. The incremental capital output ratio (ICOR) is defined as the ratio between investment in some previous period(s) and the growth in output in the subsequent period.Needless to say, ICOR calculation is based on constant price data.ormula or Equation Note. The incremental capital output ratio (ICOR) is defined as the ratio between investment in some previous period(s) and the growth in output in the subsequent period. Needless to say, ICOR calculation is based on constant price data.
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Efficiency Ratios All else equal, the higher the total asset turnover, the better. No matter what kind of business a company is in, it must invest in assets to perform its operations. Efficiency ratios measure how effectively the company utilizes these assets, as well as how well it manages its liabilities. Inventory Turnover = (Cost of Sales) / (Average Inventory). Accounts Receivable Turnover = Revenue / (Average Accounts Receivable).
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- Total Risk-Based Capital Ratio: What it is, how it’s calculated and why it’s important to banks and credit unions. Calculation. Total Risk-Based Capital Ratio = Total Risk-Based Capital / (Total Risk-Weighted Assets-Adjustments to Risk-Weighted Assets).Definition.To measure a bank’s level of protection provided by Total Risked-Based Capital, financial analysts use the Total Risk-Based Capital Ratio, which is Total Risk-Based Capital divided by Risk-Weighted Assets.otal Risk-Based Capital Ratio: What it is, how it’s calculated and why it’s important to banks and credit unions. Calculation. Total Risk-Based Capital Ratio = Total Risk-Based Capital / (Total Risk-Weighted Assets-Adjustments to Risk-Weighted Assets). Definition.
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Return of capital Return of capital (ROC) refers to principal payments back to capital owners (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business or investment. It should not be confused with Rate of Return (ROR), which measures a gain or loss on an investment.
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What is the 'Concentration Ratio' DEFINITION of 'Concentration Ratio'. In economics, a ratio that indicates the relative size of firms in relation to their industry as a whole. Low concentration ratio in an industry would indicate greater competition among the firms in that industry than one with a ratio nearing 100%, which would be evident in an industry characterized by a true monopoly.
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Efficiency Ratios Efficiency Ratios My Accounting Course 2017-10-13T21:44:02+00:00 Efficiency ratios also called activity ratios measure how well companies utilize their assets to generate income. Efficiency ratios often look at the time it takes companies to collect cash from customer or the time it takes companies to convert inventory into cash—in other words, make sales.
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- The efficiency ratio, a ratio that typically applies to banks, in simple terms is defined as expenses as a percentage of revenue (expenses / revenue), with a few variations. A lower percentage is better since that means expenses are low and earnings are high.
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- Productivity is commonly defined as a ratio between the output volume and the volume of inputs. produce a given level of output. assessments. regulations on economic performance. productive capacity of economies. to gauge the position of economies in the business cycle and to forecast economic growth.
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Cost of capital From Wikipedia, the free encyclopedia. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view the required rate of return on a portfolio company's existing securities.It is used to evaluate new projects of a company.ince in most cases debt expense is a deductible expense, the cost of debt is computed as an after tax cost to make it comparable with the cost of equity (earnings are tax as well). Thus, for profitable firms, debt is discounted by the tax rate.
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- DEFINITION of 'Working Capital'. Working Capital is a measure of both a company's efficiency and its short-term financial health. Working capital is calculated as: Working Capital = Current Assets-Current Liabilities.The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has enough short term assets to cover ...orking Capital is a measure of both a company's efficiency and its short-term financial health. Working capital is calculated as: Working Capital = Current Assets-Current Liabilities.
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Cost of Capital Cost of capital refers to the opportunity cost of making a specific investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk.Thus, the cost of capital is the rate of return required to persuade the investor to make a given investment.ost of capital refers to the opportunity cost of making a specific investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk.
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Capital account For the accountancy use of the term, see Capital account (financial accounting) .In macroeconomics and international finance, the capital account (also known as the financial account) is one of two primary components of the balance of payments, the other being the current account.n the IMF's definition, the capital account represents a small subset of what the standard definition designates the capital account, largely comprising transfers. Transfers are one-way flows, such as gifts, as opposed to commercial exchanges (i.e., buying/selling and barter).
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DEFINITION of 'Open Position Ratio' DEFINITION of 'Open Position Ratio'. The percentage of open positions held for major currency pairs relative to all positions for major currency pairs.The open position ratio is used in forex trading, and includes both long and short positions.he open position ratio is used in forex trading, and includes both long and short positions.
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- A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required.
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- The price/earnings ratio is the ratio of a company's stock price to the company's earnings per share. The ratio is used in valuing companies. P / E = Share Price Earnings per Share {\displaystyle P/E={\frac {\text{Share Price}}{\text{Earnings per Share}}}} Higher growth firms will have higher P/E ratios Higher risk firms will have lower P/E ratios Firms with lower reinvestment needs will have higher P/E ratios
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Weighted average cost of capital Marginal cost of capital schedule. Marginal cost of capital (MCC) schedule is a graph that relates the firm's weighted average cost of each unit of capital to the total amount of new capital raised. See also. Beta coefficient; Capital asset pricing model; Cost of capital; Discounted cash flow; Economic value added; Internal rate of return
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- Understanding the Growth Model and Growth of the Capital-Output Ratio. Understanding the Growth Model : Economists' first instinct when analyzing any model is to look for a point of equilibrium. In the study of long-run growth, however, the key economic quantities are never stable.nderstanding the Growth Model and Growth of the Capital-Output Ratio. Understanding the Growth Model : Economists' first instinct when analyzing any model is to look for a point of equilibrium. In the study of long-run growth, however, the key economic quantities are never stable.
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Efficiency ratios Efficiency ratios measure the ability of a business to use its assets and liabilities to generate sales. A highly efficient organization has minimized its net investment in assets, and so requires less capital and debt in order to remain in operation.
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- The price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. For example, suppose that a company is currently trading at $43 a share and its earnings over the last 12 months were $1.95 per share.
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price/earnings ratio price/earnings ratio. Definition. The most common measure of how expensive a stock is. The P/E ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period. The value is the same whether the calculation is done for the whole company or on a per-share basis.
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Capitalization rate Although there are many variations, a cap rate is often calculated as the ratio between the net operating income produced by an asset and the original capital cost (the price paid to buy the asset) or alternatively its current market value.
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- Return On Equity (ROE) Ratio. Return on equity or return on capital is the ratio of net income of a business during a year to its stockholders' equity during that year. It is a measure of profitability of stockholders' investments. It shows net income as percentage of shareholder equity.
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Urinary System: Facts, Functions & Diseases Diseases of the urinary system. Different specialists treat urinary system ailments. Nephrologists treat kidney diseases, while urologists treat problems with the urinary tract, including the kidneys, adrenal glands, ureters, bladder and urethra, according to the American Urological Association (AUA).he only difference between the female and male urinary system is the length of the urethra, according to Merck Manuals. In females, the urethra is about 1.5 inches (3.8 cm) to 2 inches (5.1 cm) long and sits between the clitoris and the vagina.
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What is the 'Capital Adequacy Ratio - CAR' Loading the player... The capital adequacy ratio (CAR) is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures. Also known as capital-to-risk weighted assets ratio (CRAR), it is used to protect depositors and promote the stability and efficiency of financial systems around the world.
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Tier 1 capital Tier 1 capital ratio [edit]. The Tier 1 capital ratio is the ratio of a bank's core equity capital to its total risk-weighted assets (RWA). Risk-weighted assets are the total of all assets held by the bank weighted by credit risk according to a formula determined by the Regulator (usually the country's central bank).ier 1 capital ratio [edit]. The Tier 1 capital ratio is the ratio of a bank's core equity capital to its total risk-weighted assets (RWA). Risk-weighted assets are the total of all assets held by the bank weighted by credit risk according to a formula determined by the Regulator (usually the country's central bank).
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Difference Between Cap Rate and Discount Rate What is a cap rate? The capitalization rate, often just called the cap rate, is the ratio of Net Operating Income (NOI) to property asset value. So, for example, if a property was listed for $1,000,000 and generated an NOI of $100,000, then the cap rate would be $100,000/$1,000,000, or 10%.