Earnings Per Share (EPS)
What is 'Earnings Per Share - EPS' Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability. Explaining 'Earnings Per Share - EPS' Earnings per share is generally considered to be the single most important...
Earnings Before Interest, Depreciation, Amortization and Exploration (EBIDAX)
What is 'Earnings Before Interest, Depreciation, Amortization and Exploration - EBIDAX' An earnings metric used in the evaluation of oil, gas and mineral firms. The metric is used in a similar manner to the way that EBITDA is used for other firms, and allows investors and other stakeholders to get a better idea of the true earnings-generating...
Early Exercise
What is 'Early Exercise' The exercise of an option prior to its expiration date. Early exercise is only possible with American-style option contracts, which can be exercised at any time up to expiration, as opposed to European options, for which early exercise is not possible as they can only be exercised on the expiration date. Early exercise...
Earnings Multiplier
What is the 'Earnings Multiplier' The earnings multiplier is an adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used to discount future earnings, and allows investors to compare expected growth to an amount of money invested over the same period at current rates. Explaining 'Earnings Multiplier'...
ETF – Exchange Traded Funds
What is an ETF and how does it work ETFs are exchange traded funds. ETFs are a type of investment fund that hold a basket of securities, such as stocks, bonds, or commodities, and trade on an exchange like a stock. ETFs offer investors exposure to a wide range of asset classes and investment strategies. ETFs are one of the...
Earnout
What is an earnout and how does it work An earnout is a performance-based bonus that is paid out over time, typically in addition to a base salary. In order for an earnout to be paid, the employee must meet or exceed certain predetermined goals. For example, an employee who is paid a base salary of $50,000 per year plus...
Economic Exposure
What is 'Economic Exposure' A type of foreign exchange exposure caused by the effect of unexpected currency fluctuations on a company’s future cash flows. Also known as operating exposure, economic exposure can have a substantial impact on a company’s market value, since it has far-reaching effects and is long-term in nature. Explaining 'Economic Exposure' For example, assume that a large U.S. company...
Economic Calendar
DefinitionAn economic calendar is used by investors to monitor market-moving events, such as economic indicators and monetary policy decisions. Market-moving events, which are typically announced or released in a report, have a high probability of impacting the financial markets. Economic Calendar What is 'Economic Calendar' A calendar used by traders for the purpose of tracking the occurrence...
Earned Income
What is 'Earned Income' Earned income is income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses. This is the opposite of unearned income. Explaining 'Earned Income' Earned income includes any income that a person or company receives for work they have done – AKA "personal efforts". If...
Econometrics
What is econometrics and what does it involve Econometrics is the study of relationships between economic variables using statistical methods. It is concerned with the development and application of econometric models to economic data. Econometric models are used to describe relationships between economic variables, to test hypotheses about those relationships, and to make predictions about future values of economic variables. Econometricians...