Tag Archive for 'A Glossary'

Average tax rate

Average tax rate

Average tax rate

Taxes as a fraction of income; total taxes divided by total taxable income.



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Average rate of return (ARR)

Average rate of return (ARR)

Average rate of return (ARR)

The ratio of the average cash inflow to the amount invested.



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Average maturity

Average maturity

Average maturity

The average time to maturity of securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average life.



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Average life

Average life

Average life

Also referred to as the weighted-average life (WAL). The average number of years that each dollar of unpaid principal due on the mortgage remains outstanding. Average life is computed as the weighted average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal paydowns.



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Average cost of capital

Average cost of capital

Average cost of capital

A firm’s required payout to the bondholders and to the stockholders expressed as a percentage of capital contributed to the firm. Average cost of capital is computed by dividing the total required cost of capital by the total amount of contributed capital.



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Average collection period, or days’ receivables

Average collection period, or days' receivables

Average collection period, or days’ receivables

The ratio of accounts receivables to sales, or the total amount of credit extended per dollar of daily sales (average AR divided by sales * 365).



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Average age of accounts receivable

Average age of accounts receivable

Average age of accounts receivable

The weighted-average age of all of the firm’s outstanding invoices.



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Average accounting return

Average accounting return

Average accounting return

The average project earnings after taxes and depreciation divided by the average book value of the investment during its life.



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Average (across-day) measures

Average (across-day) measures

Average (across-day) measures

An estimation of price that uses the average or representative price of a large number of trades.



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Average

Average

Average

An arithmetic mean of selected stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial Average, which adds the current prices of the 30 DJIA’s stocks, and divides the results by a predetermined number, the divisor.



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