Glossary

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Return On Investments ROI

Fundamental Analysis

Return on Investment (ROI) is a financial metric used to measure the gain or loss generated on an investment relative to the initial cost of that investment. ROI is expressed as a percentage and is a key financial ratio used in fundamental analysis.

ROI provides investors with a way to evaluate the profitability of an investment and assess the potential risk associated with it. A higher ROI indicates that the investment is generating more profit per dollar invested, while a lower ROI indicates lower profitability. This information can be used to determine which investments are most attractive and make informed investment decisions.

The formula for calculating ROI is:

ROI = (Net Profit / Cost of Investment) x 100%

Where Net Profit is calculated as the revenue earned from the investment minus the costs associated with it. The cost of the investment is typically the initial purchase price.

ROI can be used in fundamental analysis to evaluate the performance of a company, industry, or portfolio of investments. By calculating the ROI of various investments, investors can identify which ones are providing the highest returns and adjust their investment strategy accordingly. It can also be used to compare the performance of different companies within the same industry or sector.

In summary, ROI is a financial metric used to measure the profitability of an investment and is a key ratio in fundamental analysis. The formula for calculating ROI is (Net Profit / Cost of Investment) x 100%.

More Glossary Terms Beginning with R

Radiolabeling
Process of attaching a radioactive isotope, such as Iodine 131.

Health Care Term Letter: R
Radiopharmaceutical
A radioactive compound used in radiotherapy or diagnosis.

Health Care Term Letter: R
Randomized Clinical Trial
A clinical trial in which the participants are assigned randomly to different treatment groups.

Health Care Term Letter: R
Rate of Change ROC
Rate of Change ROC Untitled Document Rate of Change ROC The Rate of Change (ROC) indicator is similar to momentum, a oscillator that measures the percent change in price from one period to the next. When ROC is above the 0-line and rising, prices are increasing at an increasing rate. If ROC is above the 0 line but is declining, prices are still increasing but at a decreasing rate. On the other han

Technical Indicator Letter: R
Rating Agency Condition
means the written confirmation or reaffirmation, as the case may be, from each rating agency then rating the notes that any intended action will not result in the downgrading of its then-current rating of any class of notes.

Financial Term Letter: R
Reagent
A chemical added to a sample under investigation in order to cause a chemical or biological reaction which will enable measurement or identification of a target substance.

Health Care Term Letter: R
Receivables From Customers
Primarily represents loans to customers which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets.

Financial Term Letter: R
Receivables Turnover Ratio
A ratio that measures companys ability to collect the loans (Accounts receivables) it has provided to its customers by dividing revenus by accounts recievable. High ratio indicates that company efficiently collects it outstanding recievables. Accounts Receivables Turnover Ratio Formula = (Revenue / Receivables)

Fundamental Analysis Letter: R
Receptor
a protein on the cell surface or inside the cell that is the binding sites of ligands, including agonists and antagonists.

Health Care Term Letter: R
Recession
In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity. The recession is often-cited as two consecutive quarters of negative GDP.

Economy Term Letter: R
RECIST
Response Evaluation Criteria in Solid Tumors, a US standard.

Health Care Term Letter: R
Recombinant
Novel DNA made by genetic engineering.

Health Care Term Letter: R

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Asset Turnover Ratio
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Book Value Per Common Share
Shareholders equity divided by the shares outstanding.

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Debt Coverage Ratio
A financial strength ratio that measures a companys ability to repay its debt. Debt Coverage Ratio above 1 indicates the company is able to repay its debt within one year. Debt Coverage Ratio at 0.25 indicates the company is able to repay 25% of its debt within one year. The higher the number, the stronger the financial position of the company. Debt Coverage Ratio Formula = (Ebitda / Debt)

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Debt to Equity Ratio
A financial strength ratio that measures proportion of companys Debt to Stockholders Equity. Debt to Equity Ratio displays companys indebtedness and the leverage of Stockholders Equity. The number indicates how much company owes of total Debt for one dollar of stockholders equity. The lower the number, the stronger the balance sheet of the company. Debt to Equity Ratio Formula = (Debt / Stockholde

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Earnings per Share EPS Growth Rates
The percentage of EPS change within a specific period (Y/Y year on year; Seq sequential, from proceeding period; TTM trailing twelve months).

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Fundamentals Fundamental Analysis
Fundamentals are used to evaluete companys performance, using formulas and ratios like (price to earnings ratio PE (P/E), growth rates, quick ratio ...). Fundamentals ratios are calculated using companys assets, revenus, earnings, cash flow .... Investiors use fundamentals to estimate the intrinsic value of securities.

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Gross Margin
The measurement of profitability, gross margin represents proportion of gross profit (total sales less cost of goods sold) to total sales. Gross Margin Formula = (Gross Profit / Revenues) * 100

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Gross Profit Margin
The measurement of profitability, gross profit margin represents proportion of gross profit (total sales less cost of goods sold) to total sales. Gross Margin = (Gross Profit / Revenues) * 100

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Growth Rates
The percentage of change that a specific variable (Revenue, Net Income, EPS) has done within a specific period (Y/Y year on year; Seq sequential, from proceeding period; TTM trailing twelve months).

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Income Per Employee
A ratio that measures companys productivity by dividing Income earned over the past twelve months, by the number of employees. Income Per Employee displays how much a single employee contributes to the net income of the company in the period of 12 months. Income Per Employee Formula = (Net Income / Employee)

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Interest Coverage Ratio
A financial strength ratio that measures a companys ability to service its interest payments. Interest Coverage Ratio below 1 indicates the company is not generating sufficient income to cover its interest payments. Interest Coverage Ratio Formula = (Ebitda / Interest expense )

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Inventory Turnover Ratio
A ratio that measures companys ability to sell and replace its inventory. High ratio indicates that company is able to sell its inventory in the short period. Declining ratio indicates inventory build up. There are two ways to calculate Inventory Turnover Ratio Inventory Turnover Ratio Formula = (Sales / Inventory) Inventory Turnover Ratio Formula = (Cost of Goods Sold / Inventory) The benefit of

Fundamental Analysis