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why do companies issue bonus shares
companies typically issue bonus shares for several key reasons first they encourage more retail investor participation in their stock by lowering the price per share and adding liquidity second they provide an alternative to issuing a dividend payment for rewarding investors and finally they reflect that the company is...
what are the main reasons why a company would issue bonus shares
companies issue bonus shares to make their stock more attractive for retail investors provide an alternative to a cash dividend and or reflect a position of financial health in a nutshell a company issues bonus shares to boost investment and reward shareholders 1
what are some drawbacks of issuing bonus shares
a company could potentially better utilize earnings set aside for a bonus issue to fund other activities that may generate a greater return on investment for shareholders additionally bonus shares could reduce dividend payments as they don t generate cash for a company
does a bonus issue affect a company s share price
yes the company s share price proportionally adjusts to the number of bonus shares issued for example if a company s stock price was at 10 and it had a one for one bonus issue the stock price would readjust to 5 to reflect the additional bonus shares 2
do i still need to pay tax on my bonus shares
no and yes investors aren t taxed on bonus shares when a company issues them however they must still pay capital gains tax if selling them for a net profit before filing a tax return investors should inform their accountant if they have received bonus shares to ensure that they are managed correctly from a taxation sta...
what is book building
book building is the process by which an underwriter attempts to determine the price at which an initial public offering ipo will be offered an underwriter normally an investment bank builds a book by inviting institutional investors such as fund managers and others to submit bids for the number of shares and the price...
what is a book runner
a book runner or bookrunner is the primary underwriter or lead coordinator when an investment bank issues new equity debt or securities instruments the book runner is the lead underwriting firm that runs or is in charge of the books in investment banking book runners may also coordinate with others in order to mitigate...
what is a leveraged buyout
a leveraged buyout is when one company buys another using a large amount of borrowed money to fund the purchase often the assets of the company being purchased are used as collateral for the loans taken out by the buyer
what is the difference between a book runner and a lead manager
a book runner is responsible for the entire underwriting process during the an ipo or a leveraged buyout a lead manager is responsible for finding buyers for an ipo and ensure there are no barriers to the sale these roles are often filled by the same firm
do underwriters always work for investment banks
underwriters are responsible for assessing risk during financial transactions and deciding whether they or the company they work for will assume that risk investment banks are one type of company that employs underwriters insurers and other financial institutions also employ underwriters the entire underwriting departm...
what is the book to bill ratio
a book to bill ratio is the ratio of orders received to units shipped and billed for a specified period generally a month or quarter it is a widely used metric in the technology industry specifically in the semiconductor equipment sector investors and analysts closely watch this ratio for an indication of the performan...
what is the difference between bookings and billings
bookings represent a customer s intent to commit to a purchase from your business billings represent the collection of your customer s money when the purchase is complete
what is a good book to bill ratio
a book to bill ratio greater than 1 is typically considered to be a good sign of high demand in an industry however it is important to know which performance indicator you are interested in if you need to know whether a business has enough supply to cover demand a book to bill ratio of exactly 1 means it is meeting its...
why would a company have a book to bill ratio of less than 1
a company may have a book to bill ratio of less than 1 if it is shipping out more units than it has received orders for in the current period whether that s a month or a quarter etc if a company ships out more units than it receives orders for in the same period it means it is fulfilling orders from a previous period t...
what is the book to market ratio
the book to market ratio is one indicator of a company s value the ratio compares a firm s book value with its market value a company s book value is calculated by looking at the company s historical cost or accounting value a firm s market value is determined by its share price in the stock market and the number of sh...
what does the book to market ratio tell you
if the market value of a company is trading higher than its book value per share it is considered to be overvalued if the book value is higher than the market value analysts consider the company to be undervalued the book to market ratio is used to compare a company s net asset value or book value to its current or mar...
how to use the book to market ratio
the book to market ratio identifies undervalued or overvalued securities by taking the book value and dividing it by the market value the ratio determines the market value of a company relative to its actual worth investors and analysts use this comparison ratio to differentiate between the true value of a publicly tra...
how do i calculate the book to market ratio
divide a company s book value by its market value the quotient is the book to market ratio
how is the book to market ratio used
the book to market ratio compares a company s net asset value or book value to its current or market value if the company s market value is trading higher than its book value per share it is considered to be overvalued if the book value is higher than the market value the company is considered to be undervalued for who...
what is the book to market ratio
the book to market ratio is one indicator of a company s value the ratio compares a firm s book value with its market value a company s book value is calculated by looking at the company s historical cost or accounting value a firm s market value is determined by its share price in the stock market and the number of sh...
what does the book to market ratio tell you
if the market value of a company is trading higher than its book value per share it is considered to be overvalued if the book value is higher than the market value analysts consider the company to be undervalued the book to market ratio is used to compare a company s net asset value or book value to its current or mar...
how to use the book to market ratio
the book to market ratio identifies undervalued or overvalued securities by taking the book value and dividing it by the market value the ratio determines the market value of a company relative to its actual worth investors and analysts use this comparison ratio to differentiate between the true value of a publicly tra...
how do i calculate the book to market ratio
divide a company s book value by its market value the quotient is the book to market ratio
how is the book to market ratio used
the book to market ratio compares a company s net asset value or book value to its current or market value if the company s market value is trading higher than its book value per share it is considered to be overvalued if the book value is higher than the market value the company is considered to be undervalued for who...
what is book value per share bvps
book value per share bvps measures the book value of a firm on a per share basis bvps is found by dividing equity available to common shareholders by the number of outstanding shares book value equals a firm s total assets minus its total liabilities investopedia madelyn goodnightmeasuring book value per share bvps the...
what does book value per share bvps tell investors
bvps is the sum that shareholders would receive if the firm is liquidated investors use bvps to gauge whether a stock price is undervalued by comparing it to the firm s market value per share
how can companies increase bvps
a company can use a portion of its earnings to buy assets that would increase common equity along with bvps or it could use its earnings to reduce liabilities which would also increase its common equity and bvps
how does bvps differ from market value per share
the calculation for bvps uses historical costs however the market value per share a forward looking metric accounts for a company s future earning power as a company s potential profitability or its expected growth rate increases the corresponding market value per share will also increase the bottom linebook value per ...
what is book value per common share
book value per common share or simply book value per share bvps is a method to calculate the per share book value of a company based on common shareholders equity in the company the book value of a company is the difference between that company s total assets and total liabilities and not its share price in the market
should the company dissolve the book value per common share indicates the dollar value remaining for common shareholders after all assets are liquidated and all creditors are paid
the formula for book value per common share is the book value per common share formula below is an accounting measure based on historical transactions b v p s t o t a l s h a r e h o l d e r e q u i t y p r e f e r r e d e q u i t y t o t a l o u t s t a n d i n g s h a r e s bvps frac total shareholder equity preferre...
what does bvps tell you
the book value of common equity in the numerator reflects the original proceeds a company receives from issuing common equity increased by earnings or decreased by losses and decreased by paid dividends a company s stock buybacks decrease the book value and total common share count stock repurchases occur at current st...
what is a bookie
a bookie short or slang for bookmaker is someone who facilitates gambling most commonly on sporting events a bookie sets odds accepts and places bets and pays out winnings on behalf of other people understanding bookiesbookies do not usually make their money by placing bets themselves rather they charge a transaction f...
is being a bookie illegal in the u s
no not necessarily in 2018 the u s supreme court opened the door for sports betting throughout the country if states decide in favor of it 2 some 33 states have since moved to legalize sports betting effectively ending the need for bookies to operate illegally in those states it is still fully illegal in 17 states 5how...
how do bookies make money
bookies make money by charging a fee on each bet they take known as the vigorish or the vig and pay out money when their customers win a bet their goal understandably is to make sure that incomings exceed outgoings that is generally achieved by adjusting the odds so that there s an even amount of people betting on a wi...
how much is a bookie fee
the vig that bookies charge is usually in the region of 10 though it can go higher for high profile bets such as a tight line on the super bowl 9if you or someone you know has a gambling problem call the national problem gambling helpline at 1 800 522 4700 or visit ncpgambling org chat to chat with a helpline specialis...
what is the boom and bust cycle
the boom and bust cycle is a process of economic expansion and contraction that occurs repeatedly the boom and bust cycle is a key characteristic of capitalist economies and is sometimes synonymous with the business cycle during the boom the economy grows jobs are plentiful and the market brings high returns to investo...
what causes the boom and bust cycle
although there are many variables that affect economic cycles one of the significant factors is the cost and availability of capital as well as future expectations when it is easy to borrow money businesses are more likely to invest in new equipment and higher workers thereby providing employment and contributing to hi...
how does the fed regulate economic cycles
like other central banks the federal reserve attempts to moderate economic cycles by adjusting interest rates when unemployment is high the fed lowers interest rates making it easier for businesses to borrow money and expand their operations when inflation is too high the fed raises interest rates incentivizing busines...
how do economists predict the boom and bust cycle
economists watch a variety of economic metrics to anticipate future changes in economic activity in particular changes in the producer prices and durable goods production may act as leading indicators of business activity since companies are likely to reduce production when they expect a downturn another important metr...
what is bootstrapping
the term bootstrapping refers to a situation in which an entrepreneur starts a company with little capital when an individual bootstraps they rely on money other than outside investments an individual is said to bootstrap when they attempt to establish and build a company from personal finances or the operating revenue...
how to bootstrap a business
there are a few steps that entrepreneurs can follow in order to bootstrap a business we highlight them in this section below before bootstrapping their startup company business owners should first assess whether bootstrapping makes sense for their operations it may not be financially feasible to bootstrap a company tha...
why is it called bootstrapping
bootstrapping earned its term in the 1800s based on the phrase pull oneself up by one s bootstraps or other slight variations the saying was a reference to doing difficult things by tugging on the ankle straps of high top boots the phrase has continued to be used to reference any undertaking that may require extra effo...
is bootstrapping bad
bootstrapping is not necessarily bad if a business owner doesn t have all the resources it needs on the first day of operations they may need to take special considerations to make sure the business needs are met many successful businesses have bootstrapped during its infancy and though some may negatively view the pro...
is bootstrapping sustainable
the idea behind bootstrapping is to temporarily find solutions to meet business needs until more permanent solutions are possible it is usually not in the best interest of the company to permanently bootstrap as this exposes a company to higher financial risk than necessary bootstrapping may also be taxing to the owner...
what is a borrowing base
a borrowing base is the amount of money that a lender is willing to loan a company based on the value of the collateral the company pledges the borrowing base is typically determined by a method known as margining in which the lender determines a discount factor which is then multiplied by the value of the collateral i...
why lenders use a borrowing base
lenders feel more comfortable making loans rooted in borrowing bases since those loans are made against specific sets of assets furthermore the borrowing base can be adjusted downward to protect the lender for example if the value of the collateral drops the credit limit declines along with it on the other hand should ...
what is a both to blame collision clause
a both to blame collision clause is part of the ocean marine insurance policy that states that if a ship vessel collides with another ship due to the negligence of both owners and shippers of both vessels must share in the losses in proportion with the monetary values of their cargo and interests before the collision t...
how a both to blame collision clause works
as globalization grows the shipping industry also grows in the event of a collision the company s liabilities and thus risk will be limited to ocean marine insurance an ocean marine insurance provides coverage against losses for ships it protects in the event of damage or destruction of a ship s hull and or the ship s ...
what is a bottleneck
a bottleneck is a point of congestion in a production system such as an assembly line or a computer network that stops or severely slows the system the inefficiencies brought about by the bottleneck often create delays and higher production costs the term bottleneck refers to the typical shape of a bottle and the fact ...
why is it called a bottleneck
a bottleneck occurs when there is not enough capacity to meet the demand or throughput for a product or service it is called a bottleneck since the neck of a bottle narrows and tapers restricting the amount of liquid that can flow out of a bottle at once
what is a bottleneck in manufacturing
a bottleneck occurs in manufacturing when there is a stage or stages in the process that slows down the overall production of a good for instance initial steps may rapidly assemble key parts but a crucial next step that welds the parts together may not be able to keep pace with the earlier stages as a result a backlog ...
what is a bottleneck in the services industry
many services are carried out by human beings who have a natural limit on how fast or efficiently they can work for instance a barber may only be able to cut the hair of three individuals per hour if more people want a haircut they will have to wait and this can cause a backlog ways to reduce a bottleneck are to hire a...
what is the bottom line
the bottom line refers to a company s earnings profit net income or earnings per share eps the reference to the bottom line describes the relative location of the net income figure on a company s income statement the term bottom line is commonly used in reference to any actions that may increase or decrease net earning...
how the bottom line is used
the bottom line or net income of a company does not carry over from one accounting period to the next on the income statement accounting entries are performed to close all temporary accounts including all revenue and expense accounts at the end of the period upon the closing of these accounts the net income is transfer...
what is bottom up investing
bottom up investing is an investment approach that focuses on analyzing individual stocks and de emphasizes the significance of macroeconomic and market cycles in other words bottom up investing typically involves focusing on a specific company s fundamentals such as revenue or earnings versus the industry or the overa...
how bottom up investing works
the bottom up approach is the opposite of top down investing which is a strategy that first considers macroeconomic factors when making an investment decision top down investors instead look at the broad performance of the economy and then seek industries that are performing well investing in the best opportunities wit...
what is a bounced check
a bounced check is slang for a check that cannot be processed because the account holder has non sufficient funds nsf available for use banks return or bounce these checks also known as rubber checks rather than honor them and banks charge the check writers nsf fees passing bad checks can be illegal and the crime can r...
when there are insufficient funds in an account and a bank decides to bounce a check it charges the account holder an nsf fee if the bank accepts the check but it makes the account negative the bank charges an overdraft fee if the account stays negative the bank may charge an extended overdraft fee
different banks charge different fees for bounced checks and overdrafts but as of 2022 the average overdraft fee was 29 80 3 banks usually assess this fee on drafts worth 24 and these drafts include checks as well as electronic payments and some debit card transactions
what happens when a check bounces
bank fees are just one part of bouncing a check in many cases the payee also assesses a charge for example if someone writes a check to the grocery store and the check bounces the grocery store may reserve the right to redeposit the check along with requiring the writer to pay them a bounced check fee in other cases if...
how to avoid bounced checks
consumers can reduce the number of bounced checks they write by tracking their bank balances more carefully by using an ironclad system of recording every single debit and deposit on a check register as soon as it occurs or by keeping close tabs on their checking account by using online banking consumers can also fund ...
how serious is a bounced check
if you write a check for an amount that you had insufficient funds to cover your bank will most likely charge you a non sufficient funds nsf fee as well as potentially an overdraft fee the business to which you wrote the bounced check may also levy a charge against you for the lack of payment other consequences of a bo...
how long does it take for a check to bounce
generally speaking a check for an amount greater than 225 won t clear until two or more business days after it s deposited at a bank 6 in the same vein it typically takes at least two business days for a bad check to bounce will my bank notify me if a check bounces banks aren t required to notify an account holder when...
what are boundary conditions
boundary conditions are the maximum and minimum values used to indicate where the price of an option must lie boundary conditions are used to estimate what an option may be priced at but the actual price of the option may be higher or lower than what is set as the boundary condition for all options contracts the minimu...
what is a box spread
a box spread or long box is an options arbitrage strategy that combines buying a bull call spread with a matching bear put spread a box spread can be thought of as two vertical spreads that each has the same strike prices and expiration dates box spreads are used for borrowing or lending at implied rates that are more ...
what is brain drain
brain drain is a slang term that refers to a substantial emigration or migration of individuals out of a country it can result from turmoil the existence of favorable professional opportunities in other countries or a desire to seek a higher standard of living brain drain can also occur at the organizational or industr...
what does brain drain mean
brain drain is a slang term that refers to the loss of human capital from one area to another or from one industry to another it usually happens when skilled individuals and professionals leave their home countries often developing nations and go elsewhere to take advantage of better opportunities it also occurs when i...
how does economic growth help fight brain drain
brain drain occurs when there s a lack of opportunity in a certain area professionals living in a developing nation might leave in search of better opportunities in parts of the developed world making economic investments to boost growth often provides incentives for people to stay because it means access to better and...
what impact does brain drain have on developing nations
brain drain and the exodus of human capital often have a big impact on developing nations it leaves a hole that s hard to fill because there may not be as many people with similar skills to fill the void it also leads to a loss in tax revenue and this can result in higher taxation to make up for the shortfall citizens ...
what is branch accounting
branch accounting is a bookkeeping system in which separate accounts are maintained for each branch or operating location of an organization typically found in geographically dispersed corporations multinationals and chain operators it allows for greater transparency in the transactions cash flows and overall financial...
how branch accounting works
in branch accounting each branch defined as a geographically separate operating unit is treated as an individual profit or cost center its branch has its own account in that account it records such items as inventory accounts receivable wages equipment expenses such as rent and insurance and petty cash like any double ...
where branch accounting applies
branch accounting can also be used for a company s operating divisions which usually have more autonomy than branches as long as the division is not set up legally as a subsidiary company a branch is not a separate legal entity although it can somewhat confusingly be referred to as an independent branch because it keep...
what is branch banking
branch banking is the operation of storefront locations away from the institution s home office for the convenience of customers since the 1980s branch banking in the u s has gone through significant changes in response to a more competitive and consolidated financial services market one of the most significant changes...
what is the difference between branch banking and chain banking
chain banking is a form of bank governance in which individuals or an entity takes control of at least three banks that are independently chartered it differs from branch banking because chain banks are separately owned and not part of the same entity
what is a banking desert
a banking desert is a census tract or neighborhood with no bank branches in it or within 10 miles of its center
what is retail banking
retail banking provides financial services to individual consumers rather than large institutions it s also known as consumer banking or personal banking the services provided by retail banking include savings and checking accounts debit or credit cards personal loans mortgages and certificates of deposit among others ...
what is a branch manager
the term branch manager refers to an executive who is in charge of a particular location or branch office of a bank or other financial services company branch managers are typically responsible for all of the functions of that branch office including hiring employees overseeing the approval of loans and lines of credit...
what does a branch manager do
most financial institutions such as banks have operations in more than one location known as branches a branch manager is any individual that oversees the operations of one specific branch areas that a branch manager oversees include managing employees ensuring sales targets are met staff training marketing and adminis...
what are the qualifications needed to be a branch manager
branch managers will typically need a bachelor s degree management degrees are often helpful in becoming a branch manager having an understanding of financial terms and experience in operational management will also help a potential bank manager candidate will need at least five to seven years of work experience to be ...
how much does a branch manager make
the average annual salary for a branch manager as of 2021 is 62 884 this ranges from 42 000 on the low end to 95 000 on the high end salaries will depend on the institution the location and the experience of the individual among other variables 2
what is a brand
to marketing professionals a brand is a product or a business that has a distinct identity in the perception of consumers the brand is created through elements of design packaging and advertising that as a whole distinguish the product from its competitors the product contributes to the brand equity of the company that...
when a company seeks to define its public image it first must determine its brand identity or how it wants to be viewed by the public a company logo reflects its message slogan and product
the goal is to make the brand memorable and appealing to the consumer or rather to the consumer that the company is targeting whether that is hip single people couples with small children or affluent retirees the company may use a design firm or logo design software to come up with ideas for the visual aspects of a bra...
what does brand mean in marketing
a brand is a product or service that has a unique and immediately recognizable identity that distinguishes itself from others in its industry the consumer associates the product name label and packaging with particular attributes such as value quality or tastefulness a cough drop is just a cough drop but when you go to...
what is brand equity
brand equity is the commercial value of a product s reputation to the company that owns it a company s price may be determined by adding up the value of its buildings inventory and equipment but its value increases if the company owns one or more brands that have attained a solid reputation with consumers can great bra...
when we hear the word brand most of us think of a logo slogan or other identifiable mark but that s just one part of the definition the term brand is actually an intangible marketing concept that helps people recognize and identify a product and at best reach for it instead of one of its competitors
a company s brands are among the most important and valuable assets that it owns they can make or break a company that s why companies do extensive research before launching a new product they work to identify the target market for their product from there every aspect of its content design and marketing is tailored to...
what is brand awareness
brand awareness is a marketing term for the degree to which consumers recognize a product by its name ideally consumers awareness of the brand may include positive perceptions of the qualities that distinguish the product from its competition creating brand awareness is a key step in promoting a new product or reviving...
how brand awareness works
products and services that maintain a high level of brand awareness are likely to generate more sales consumers confronted with choices are simply more likely to buy a name brand product than an unfamiliar one consider the soft drink industry removed from their packaging many soft drinks are indistinguishable the giant...
what is brand equity
brand equity is the value premium that a company generates from a product with a recognizable name when compared to a generic equivalent companies can build their brand equity with their products by making those products memorable easily recognizable and superior in quality and reliability mass marketing campaigns also...
when a company has positive brand equity customers willingly pay a high price for its products even though they could get the same thing from a competitor for less customers in effect pay a price premium to do business with a firm they know and admire
because the company with brand equity does not incur a higher expense than its competitors to produce the product and bring it to market the difference in price goes to their margin the firm s brand equity enables it to make a bigger profit on each sale investopedia yurle villegasunderstanding brand equitybrand equity ...
when customers attach a level of quality or prestige to a brand they perceive that brand s products as being worth more than products made by competitors thus they are willing to pay more for them in effect the market bears higher prices for brands that have high levels of brand equity
yet the cost of manufacturing a polo shirt and bringing it to market is not higher at least to a significant degree for an established company such as lacoste than it is for a less reputable brand however because its customers are willing to pay more it can charge a higher price for that shirt with the difference going...
why is brand equity important
brand equity is important for increased customer loyalty which can translate to repeated and increasing sales despite higher priced products or services brand equity is also important because it supports higher perceived value greater customer satisfaction and a more stable customer base simply put consumers are more l...
what are the elements of brand equity
the elements of brand equity include
what factors affect brand equity
several factors can affect brand equity one is the quality of products or services consumers are more likely to have a positive perception of a brand if it consistently provides high quality products or services consistent marketing and branding efforts are also important these can help build and maintain a positive br...
what is brand extension
a brand extension is when a company uses one of its established brand names on a new product or new product category it s sometimes known as brand stretching the strategy behind a brand extension is to use the company s already established brand equity to help it launch its newest product the company relies on the bran...
how brand extension works
a brand extension leverages the reputation popularity and brand loyalty associated with a well known product to launch a new product to be successful there must be a logical association between the original product and the new item a weak or nonexistent association can result in the opposite effect brand dilution this ...
what is brand identity
brand identity is the visible elements of a brand such as color design and logo that identify and distinguish the brand in consumers minds brand identity is distinct from brand image the former corresponds to the intent behind the branding and the way a company does the following all to cultivate a certain image in con...
why does brand identity matter
brand identity matters because without it customers are not able to recognize a brand easily a strong master brand may help sell a company to consumers and impart strength to all sub brands
what makes a good brand
a good brand has a clear focus strong visuals is familiar with its target audience family versus mature audience for example and is easily recognizable in a sea of similar brands
what are famous brands
nike mcdonald s apple google disney and amazon have some of the most recognizable and valuable brands 3
as harvard business review hbr has reported companies with high scores on two often overlooked and closely related market research metrics brand loyalty and customer loyalty not only grow revenues 2 5 times faster than industry peers but also deliver two to five times the returns to shareholders over 10 year time frame...
the primary reason that brand loyalty is so important to profitability is straightforward 65 of revenue in most companies comes from repeat business with existing clients 2 not only do existing customers loyal to brands purchase 90 more frequently than new customers but maintaining the brand loyal segment is also far l...
what is brand loyalty
unlike customer loyalty which is money based prices and discounts brand loyalty is perception based image and experience brand loyal customers believe that a certain brand represents both higher quality and better service than any competitor and the price does not matter brand loyal customers might make fewer total pur...