Term
Net Income
Net income is a firm's profit for a period. The growth rate of net income is how much the net income changes from one period to another. The period can be months, years or any other period of time
Net Income = Revenues - Expenses |
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Definition
The goal of a company is to produce profits for the owners. Also known as net profits and net earnings, net income is perhaps the most familiar statement of that profitability as it appears on a company's income statement. While the term profit can have different meanings, net income is the money left over after all of the expenses have been removed from revenues.
Investors and analysts monitor net income since this is the money returned to shareholders in the form of a stock dividend or retained earnings. |
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Term
Loan Growth
For many banks, loan growth is as important as revenue growth to most industrial companies. The trouble with loan growth is that it is very difficult for an outside investor to evaluate the quality of the borrowers that the bank is serving. Above-average loan growth can mean that the bank has targeted attractive new markets, or has a low-cost capital base that allows it to charge less for its loans. On the other hand, above average loan growth can also mean that a bank is pricing its money more cheaply, loosening its credit standards or somehow encouraging borrowers to move over their business.
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Definition
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Term
Price Per Share
the price earnings ratio shows what the market is willing to pay for a stock based on its current earnings.Investors often use this ratio to evaluate what a stock's fair market value should be by predicting future earnings per share. Companies with higher future earnings are usually expected to issue higher dividends or have appreciating stock in the future[image] |
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Definition
A company with a high P/E ratio usually indicated positive future performance and investors are willing to pay more for this company's shares.In general a higher ratio means that investors anticipate higher performance and growth in the future. It also means that companies with losses have poor PE ratios.
A company's earnings per share, or EPS, is found by taking net income (or profits) divided by the shares of common stock outstanding. This measure allows the analyst to understand the amount of money left over for each share of stock issued to the public. The value is reported on an after-tax basis |
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Term
Tangible Book Value (alternately "Net Tangible Assets" or "Net Tangible Equity") is the total net asset value of a company (book value) minus intangible assets and goodwill.
A company's standard book value may be significantly affected by intangible assets and/orgoodwill. As the values of these assets are more subjective than "hard" assets (such as cash or property, plant and equipment), including them in the calculation of book value may misrepresent the underlying worth of the company. Thus, In general, tangible book value can be thought of as the worth of all of the company's physical "stuff" and is therefore a close approximation to what the company might expect to see returned in a liquidation. |
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Definition
| Tangible Book Value = book value minus intangible assets and goodwill |
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Term
What is the 'Tangible Common Equity Ratio - TCE'=
The tangible common equity ratio (TCE) is a ratio used to determine how much losses a bank can take before shareholder equity is wiped out. The Tangible Common Equity (TCE) ratio is calculated by taking the value of the company's total equity and subtracting intangible assets, goodwill and preferred stock equity and then dividing by the value of the company's tangible assets. Tangible assets is the company's total assets less goodwill and intangibles.
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Definition
This ratio became popular when evaluating banks during the credit crisis in 2008. Its conservative approach has made it a very risk free way for investors to evaluate worst case scenarios of their investments.
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