Economic assumptions

Economic assumptions

Economic assumptions

Economic environment in which the firm expects to reside over the life of the financial plan.

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Earnings yield

Earnings yield

Earnings yield

The ratio of earnings per share after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price to earnings ratio. It’s the Total Twelve Months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage.

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Earnings surprises

Earnings surprises

Earnings surprises

Positive or negative differences from the consensus forecast of earnings by institutions such as First Call or IBES. Negative earnings surprises generally have a greater adverse affect on stock prices than the reciprocal positive earnings surprise on stock prices.

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Earnings retention ratio

Earnings retention ratio

Earnings retention ratio

Plowback rate.

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Earnings per share (EPS)

Earnings per share (EPS)

Earnings per share (EPS)

EPS, as it is called, is a company’s profit divided by its number of outstanding shares. If a company earned $2 million in one year had 2 million shares of stock outstanding, its EPS would be $1 per share. The company often uses a weighted average of shares outstanding over the reporting term.

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Earnings before interest and taxes (EBIT)

Earnings before interest and taxes (EBIT)

Earnings before interest and taxes (EBIT)

A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.

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Earnings

Earnings

Earnings

Net income for the company during the period.

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EAFE index

EAFE index

EAFE index

The European, Australian, and Far East stock index, computed by Morgan Stanley.

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