money sectionmoney sectionYou inherit more than just stocks when a loved one dies: You also inherit a tax bill. The amount of your tax liability depends entirely on the amount of stock you inherit and its value. Your tax liability for inherited property is calculated according to the IRS's basic formula for determining your cost basis in the stock that you inherit. This formula gives you one of a number of ways to determine your cost basis in the stock and, thus, your tax liability.
Stock trading has become less expensive, thanks in large part to advances in telecommunications technology. You can sign up for an online brokerage account and trade for as little as $5 per order. However, you will incur commissions on both the buy and sell sides of each trade. This means that if you are an active trader executing several trades during the day, the commissions could add up and affect your overall investment profits.
Investing in the stock market can be a good way to build long-term wealth, but it is not wise to keep all of your money in stocks. Building a diversified portfolio means including not only individual stocks and stock mutual funds but bonds, commodities and secure fixed income investments as well. Calculating your exposure to the stock market can help you when reviewing your asset allocation to make any necessary adjustments and keep your investments on track.
When you calculate your gains and losses on stock sales, it can be tempting to only count the increase or decrease in the stock price. However, to figure your true gain, you need to account for your transaction costs, also known as commissions. Knowing the commission you paid, the price at which you bought the stock, the selling price and the number of shares you own allows you to figure out you stock sale profits.
One of the magic words that every stock investor longs to hear is "oversold." In basic terms "oversold," when applied to publicly traded stock in a business, simply means that it's a good value. Investors, for whatever reason, are selling the stock at prices less than the stock's intrinsic value. Assuming the stock price will eventually stabilize at its intrinsic value, oversold stock is good value for stock buyers. Using bits of data such as historic stock prices, earnings-per-share (EPS), price-to-earnings ratio (P/E), similar stock's value and market events you can determine whether a stock is oversold.
Investors often choose specific quantities of stock to buy and sell when making orders throughout the trading day. These stock amounts depend on the plans of the investors and how popular the stock currently is in the market. However, stock quantity also matters in a more total view, known as stock volume, which is a reference to stock market activity and is important to how the stock market affects the economy on a day-to-day basis.
Investing in stocks is easier than ever, and average people with no formal training in trading are buying and selling shares daily. However, trading stocks successfully hinges largely in part on individuals' ability to calculate expectancy. In laymen's terms, this is the average amount of money you can expect to gain over many trades using a specific trading methodology, or how much you stand to gain per dollar risked.
Stocks that pay dividends are termed income stocks. These stocks pay out a dividend per share according to the companies' profits. Payments occur when a company announces a dividend. If a stockholder does not have a dividend statement available to determine how much a stock has paid out in a year, then he can use a basic dividend formula to calculate a dividend payment, which is: Total profits after taxes, minus retained profit, divided by the number of outstanding shares.
Stock-based compensation, or stock options, require an employee to perform services for a period of time (the vesting period) to have the right to purchase the company's stock . Options must be exercised on a certain date (exercise date) and the underlying stock can be purchased at a specified price (exercise, target or option price). For companies, options need to be valued because their costs need to be allocated starting from the date the option is issued and throughout the employee's vesting period. The Black-Scholes method is a formula typically used to value stock options. The formula requires the input…
Businesses use a variety of turnover ratios to help measure how well a company is running. Turnover ratios include the employee turnover ratio, the inventory turnover ratio, and the asset turnover ratio. The employee turnover ratio measures the percentage of the employees that must be replaced annually. The lower, the better, because that is less money that the company has to spend on hiring and training new employees. The inventory turnover ratio measures how often a company goes through its inventory. The higher, the better, because that means a company is not tying up significant resources in holding inventory. The…
CAC or Customer Acquisition Cost is an important tool for marketers and companies to benchmark their campaigns. For example, it can help to determine whether a television or Internet advertising campaign was better or worse than past ones. Using this ratio, managers can optimize the company to increase customers while decreasing the costs associated with them. Accurately calculate your company's CAC using a few basic steps.
A share of stock is proof of a certain amount of ownership of a particular company or trust. Holding stock in a company gives you the right to a certain amount of the company's net profits, and this dispersal of profits among stockholders is a dividend. The amount of money that stockholders receive in dividends depends on the performance of the company as a whole.
Consistency is the term used within the pulping and paper making Industries to describe the dry solid content of a wood pulp slurry in water. Pulp consistency is roughly divided in to three ranges. Each piece of equipment and unit operation in the pulp and paper-making processes are designed to operate optimally within a specific consistency range. In the USA the Technical Association of the Pulp and Paper Industries--TAPPI--issues standard procedures for testing commonly used in the pulp and paper-making processes. A simplified version of the TAPPI procedure for determining paper-stock consistency for slurries up to 4 percent is presented…
In some economic situations, like inelastic demand and variable supply, average prices can be maintained by holding a commodity. This is called buffer stock. To raise a price, someone can buy and store stock, thus reducing supply. When prices need to come down, one sells from the stocks bought in previous years, thus increasing supply and lowering price. By doing this, an average price is maintained. This is generally used in agriculture.
Calculating, or measuring, stock risk comes down to estimating the market and nonmarket risks of a certain stock. Nonmarket risk, also known as stock-specific risk, refers to the risks associated with factors that are unique only to this stock and no other (e.g., the company doesn't meet its profit forecast). Market risk is the risk the stock market as a whole, or significant parts of it, will decline, pulling the stock in question down as well.
Cash dividends are when a company has extra earnings and chooses to distribute those earnings to investors in the company instead of retaining the earnings. Stock dividends are when a company decides to issue stock to investors, instead of cash. Depending on the company, a company will pay dividends anywhere from four times a year to once a year. Some companies do not pay dividends at all.
Outstanding shares are shares held by investors. Shares such as treasury stock do not count since treasury stock is owned by the company itself. Accountants, analysts, investors and managers use outstanding shares for financial analyses such as earnings per share and diluted earnings per share calculations. These are important when comparing two different companies to create a relative value.
There are two major ways that stock indexes are calculated. One form of calculation is called a price-weighted index. The Dow Jones Industrial Average is an example. The other form of calculation is a market-cap-weighted index. The Nasdaq and Standard and Poor's 500 are examples of indexes that are calculated using market-cap weighting. Doing some math will allow you to calculate the price of each type of index.
Stock turn compares inventory to sales. The stock turn rate shows how quickly inventory turns over within a company, which means how many times the inventory is converted into a sale during the period. Stock turn is important because it gives executives an idea of how efficient a company is at changing inventory to sales.
Stock turnover is the lifeblood of any manufacturing company. The speed with which a company can turnover inventory reduces the length of time the company has to sit on inventory that may also have a carry (interest) value. Additionally, the faster a company can turnover inventory, the faster the company can respond to changes in customer demand. The most commonly used metric to measure inventory turnover is stock turnover days.
Safety stock is a term in inventory management that stands for an amount of product ordered to account for a variety in consumer demand. When inventory is ordered, it is important to minimize the difference between the demand for your product and the amount of product you have, both in stock and on order. Therefore, an equation can be used to determine what a reasonable amount of safety stock should be ordered in addition to the quantity needed to maintain a base stock level. Below are instructions to calculate the safety stock on paper once you know all your variables,…
Stock turnover is the same as inventory turnover. To maintain a profitable business a firm must find the right inventory balance. The stock turnover ratio compares the cost of goods sold with the cost of inventory and is the best measure of efficiency in inventory management.
It is said that the stock market is $51 trillion, but how we get a piece of that money pie is the subject of stock returns. From listed markets, or outcry markets, to the NASDAQ, people have been trading the stock market for hopes of high profits over the long run. This article will not cover the basics of stock exchange, buying or selling, but rather it will focus on the calculations of loss, gain and dividends.
