Definition of accounting rate of return in English English dictionary
a rate used to evaluate the acceptability of an investment; equals the after-tax periodic income from a project divided by the average investment in the asset; also called rate of return on average investment (p 1104)
Accounting measure of income divided by an accounting measure of investment Also called return on investment (ROI)
A method of computing the profitability where the total cash inflow over the life of the project is reduced by expenses This amount is divided by the estimated life of the project to arrive at an annual return That's divided by the investment's cost The result is an average rate of return See Discounted Cash Flow
A percentage formed by taking a project's average incremental revenue minus its average incremental expenses (including depreciation and income taxes) and dividing by the project's initial investment
Return on invested capital (calculated as a percentage) Often an investor has, as one of their investment criteria, a minimum acceptable rate of return on an acquisition
Calculated as the (value nowminus value at time of purchase) divided by value at time of purchase For equities, we often include dividends with the value now See also: Return, annual rate of return
The Rate of Return is the gain or loss generated from an investment over a specified period of time It is also referred to as total return, and it includes the change in the value of a security plus all Interest, Dividends and capital gains distributions generated by holding that security
The rate of return on an investment is the amount of profit it makes, often shown as a percentage of the original investment. High rates of return can be earned on these investments. a company's profit for a year, expressed as a percentage of the money that the company has spent during the year
{i} ratio of money earned or lost on an investment in proportional relation to the sum of money invested (expressed as a percentage of the total sum invested)
Calculated as the (value now minus value at time of purchase) divided by value at time of purchase For equities, we often include dividends with the value now See also: Return, annual rate of return
Rate of return is simply how much you earn from an investment over time Rate of return includes interest payments or dividend payments as well as the difference between an investment's starting price and its ending price Rates of return are typically calculated as a percentage, which is the growth in value of an investment over a time period compared to its starting value An investment does not need to be purchased or sold to make this calculation The market price is used to measure a rate of return
An investors total return on a particular investment and/or investment portfolio This is stated in a percentage and reflects the gain/loss (or dollars earned/lost) over a given period of time In calculating returns, investors should deduct any management fees or other charges they are paying
Percent change in stock prices over a specified time period All of the major calculations in TaraFolioTM are based on perchange changes in stock prices This is the only way to consistently compare returns among different securities That is, a $10 return on a $100 investment would be equivalent to a dollar return on a $10 investment Real returns are important as opposed to nominal returns
The average annual benefits from an investment divided by the net present value of all costs associated with the investment Average annual benefits are calculated as the net present value of all benefits divided by the useful life of the investment
How much money you get back for your investment For stocks, it's the annual dividends divided by the purchase price For bonds, it's the actual amount of interest earned
Calculated as the (value now minus value when you purchased) divided by the value when you purchased For equities, we often include dividends with the value now See also: return, annual rate of return
Also called the internal rate of return, the interest rate will make the present value of the cash flows from all the sub-periods in the evaluation period plus the terminal market value of the portfolio equal to the initial market value of the portfolio
The annualized return on a fixed income investment is a combination of the percentage change in the price of the security and the coupon interest earned over the same period If a security is held to maturity its rate of return will equal the yield to maturity This may be amortized yield to maturity on a bond or the current income return