A measure of a firm's financial strength, calculated as follows: |||Many analysts, as well as some of the greatest investors of all time, place more weight on cash flow per share than earnings per share. Because EPS is more easily manipulated, its reliability can at times be questionable. Cash, on the other hand, is difficult - if not impossible - to fake. You either have cash or you don't. Therefore, cash flow per share is a useful measure for the strength of a firm and the sustainability of its business model.
A measure of financial performance that looks at the company's ability to generate cash flow through its operations. It is calculated by adding back non-cash accounts such as amortization, depreciation, restructuring costs and impairments to net income.Also known as "After-Tax Cash Flow". |||CFAT is important for investors because it gauges a corporation's ability to pay dividends. The higher the CFAT, the better positioned a business is to make distributions. CFAT also measures the company's financial health and performance over time and in comparison to competitors.
A measure of financial performance that looks at the cash flow generated by a company on a per share basis. This differs from basic earnings per share (EPS), which looks at the net income of the company on a per share basis. The higher a company's cash EPS, the better it is considered to have performed over the period. A company's cash EPS can be used to draw comparisons to other companies or to the company's own past results. Watch: Earning Per Share |||You may sometimes see cash EPS defined as either EPS plus amortization of goodwill and other intangible items, or net income plus depreciation divided by outstanding shares. Whatever the definition, the point of cash EPS is that it's a stricter number than other variations on EPS because cash flow cannot be manipulated as easily as net income.
A measure, used in Canada, that refers to the amount of cash payments made to individual unitholders of a specified income trust, as designated by the Canada Revenue Agency. The ratio is calculated by taking the total amount of cash distributions divided by the total amount of unit shares issued. |||This useful ratio summarizes the amount that each single unitholder will receive as a trust payment (similar to a dividend for preferred shares). Trust payments are mandatory for income trusts as long as there are positive earnings for a particular period. The more income the trust earns, the more will be paid out in the form of trust payments. Some business analysts argue that the nearly 100% distribution of earnings before income taxes to unitholders is a negative thing for firms, as there is little money left over to re-invest into the business in order to stimulate growth.
A statistical theory that states that given a sufficiently large sample size from a population with a finite level of variance, the mean of all samples from the same population will be approximately equal to the mean of the population. Furthermore, all of the samples will follow an approximate normal distribution pattern, with all variances being approximately equal to the variance of the population divided by each sample's size. |||This statistical theory is very useful when examining returns for a given stock or index because it simplifies many analysis procedures. An appropriate sample size depends on the data available, but generally speaking, having a sample size of at least 50 observations is sufficient. Due to the relative ease of generating financial data, it is often easy to produce much larger sample sizes.
An order given by a government administrative agency or the courts to stop any suspicious or illegal activities. Falling under the Financial Institutions Regulator Act of 1978, a cease-and-desist order places an injunction on a company or person, prohibiting the activities that are deemed suspect. |||For corporations or financial institutions, a cease-and-desist order may be issued to prevent risky banking practices or the sale of fraudulent securities. After notification is given, a hearing is usually called to determine whether any wrongdoing has occurred, or if the action may continue. Failure to comply with a cease-and-desist order is punishable by the courts.
A measure of financial performance calculated as gross cash flow after taxes divided by gross investment. |||CROGI is used by some companies as an indicator for rate of return. Another way to calculate this measure is EBITDA less taxes and then divided by total assets.
A member of the Academy of Financial Divorce Practitioners who is certified in the financial aspects of divorce. A certified financial divorce practitioner looks to explain the financial implications of divorce settlements, such as child support, asset distribution and alimony. |||To become a CFDP, a candidate must complete the training offered by the Academy of Financial Divorce Practitioners. Training involves undergoing a 10-week program or completing a self-study materials package. Both methods of training are concluded with an examination, which must be passed before the designation is awarded.