Finance Archives - CFAJournal

What are Non-Financial Key Performance Indicators? (6 Important Indicators Included)

Non-financial Key Performance Indicators, which are also referred to as the intellectual capital of any company, are an increasing attribute for business drivers. It includes all knowledge, corporate reputation, relationship, information, data, skills, brands, patents, trust, or processes that are at the disposal of businesses. Non-financial KPI refers to other measures that are being used …

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How is Financial Break-even Calculated? (Formula, Example, and Calculation)

Finance

Breakeven concerns itself with an entity’s margin of safety. The term is used by accounting firms, investment institutes, and companies in general. Financial breakeven differs from accounting breakeven. While accounting breakeven concerns itself with the point at which a company is neither making profit or loss, that is a position where the company’s revenue and …

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What Causes Financial Distress? (Top 6 Reasons You Should Know)

Finance

The term “financial distress” is a common experience many individuals and organizations have gone through. When an individual is going through financial distress, the person cannot generate enough income to cover their expenditure. Financial distress occurs in an organization when the company cannot generate revenue that is sufficient to cater to all financial obligations. There …

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How Do Equity Research Firms Make Money? And Who are They?

Finance

Equity research is all about producing reports. These reports are targeted towards investors to provide the financial analysis that would enable them to choose what investment to buy, sell, or hold. Equity research is also used to provide timely analysis and quality news, which in most cases is used by financial institutions as a means …

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What is Gordon’s Model of Dividend Policy? (Formula, Example, Calculation, and More)

Dividend

Gordon Growth model is based on the concept of dividend growth in the future. If the company does not make some significant breakthrough/unexpected growth or faces some extreme misfortune, then the growth depends on doing more for the same work. For instance, if the company has four retail outlets, it needs to expand from 4 …

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What Is A Portfolio Immunization Strategy? (Definition, Understanding, And How Does it Work?)

Finance

Definition: Portfolio Immunization is a strategy that is used to manage your portfolio with a financial goal. This goal can be determined with your investment to a specific amount or at a certain point. Further, this strategy is used to fund a future liability. Immunization is one of two kinds of dedicated portfolio strategies. Understanding …

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What Are the Factors Affecting Dividend Policy of the Company? (Explained)

Dividend

The announcement of dividends is one of the board of directors’ essential decisions to execute strategic and operational aspects of the Company. So, it’s important to manage the expectations of the shareholders and the Company’s needs for the financing. It’s not always the case that shareholders want higher dividends as their priority may be capital …

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How Soon After Ex-Dividend Date Can I Sell? All You Need to Know

Dividend

Overview When you own dividend stocks, it’s important to understand the dividend dates. Dividend announcements and changes can impact stock prices as well. Many investors look to make quick profits with changes in stock prices around the ex-dividend date through dividend capture. Investors of mutual funds and ETFs receive periodic payments as well. Hence, a …

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What If the Dividend Payout Ratio is More Than 100? All You Need to Know

Dividend

A company’s dividend payout ratio is a key performance metric. How you can calculate it and what is a good dividend payout ratio? Is a payout above 100% good or bad? The dividend ratio defines the profit amount distributed as dividends out of the total earnings. Investors consider the payout ratio as a key performance …

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What Are the 4 Types of Dividend Policy? (Explained)

Dividend

A company’s dividend policy suggests the payout frequency, amount, and timings of the dividends paid out to its shareholders. Income-oriented investors are particularly keen on knowing a company’s dividend policy. There are four types of dividend policies. Each type of policy offers its pros and cons to shareholders and the company. Proponents of dividend irrelevancy …

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