There are several ratios that investors may use to gauge a company’s profitability and performance. Some of these may focus on the company’s profitability only. However, some others also help investors measure the company’s performance and efficiency. Among those, one of the most prominent ratios is the Return on Capital …

Investors can use various profitability ratios to evaluate whether they should invest in a company. Some of these ratios are basic and allow investors to determine whether the company is profitable. However, investors may also want to know the returns they will get on their invested amounts. For these calculations, …

The Capital Asset Pricing Model (CAPM) is a model that describes the relationship between systematic risk and anticipated returns. It is a model commonly used by companies to calculate their cost of capital. They may also use some other models. However, CAPM considers the systematic risk of investments, making it …

Financial analysts study various companies to identify ones from which investors can benefit. Among these, there are two types of analysts. These include buy-side and sell-side analysis. Both of these are different in various aspects. Who are Buy-Side Analysts? Buy-side analysts are institutional investors who collect money from investors and …

What is a Leveraged Buyout? A leveraged buyout represents a strategy that companies use to acquire other companies using debt as the primary source of finance. Leveraged buyouts may also include using the acquired company’s assets as collateral to finance the transaction. Sometimes, however, companies may also use their own …

Companies need to face various types of risks during their operations. Most of these risks accompany adverse implications for a company and cause damage to its operations. Therefore, identifying and dealing with these risks promptly is crucial for a company’s success. These risks may come in various forms and from …

When companies and businesses start operations, they may not be profitable. However, once they develop a customer base and good supplier relationships, they can earn more. These are things that come due to a company’s reputation, often termed as goodwill. Developing a good reputation is crucial for a company’s success …

Operational risk represents the risk that comes due to uncertainties and hazards in a company’s operations. Operational risk is a type of business risk and can impact a company’s profits adversely. This risk exists for every business and company. There are various operational risks that companies may face, one of …

Businesses can come in various forms and sizes. For example, these may include sole proprietorships, partnerships, corporations, and many more. There are even more classifications in each type. However, the most basic form is still a sole proprietorship. Sole proprietorships have existed from the beginning of time. These businesses have …

What is a Dividend Reinvestment Plan? A dividend reinvestment plan (DRIP) represents a plan that companies offer to shareholders. Through this plan, shareholders can automatically reinvest their cash dividends in additional shares of the company on the dividend payment date. It may also refer to other programs set up by …