Growth in sales
A ratio comparing sales levels to sales in a base year; it identifies the percentage of increase in volume. |
Similar financial terms
Growth in earnings per shareA ratio comparing current earnings per share to the same ratio in a base year; it is used to track rates of growth for the economy.
Sustainable growth rate
Maximum rate of growth a firm can sustain without increasing financial leverage.
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to the initial value and assuming a constant percentage annual rate of growth between these two values.
Present value of growth opportunities (PVGO)
The net present value (NPV) of investments the firm is expected to make in the future.
Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.
Constant-growth model
Also called the Gordon-Shapiro model, an application of the dividend discount model which assumes (a) a fixed growth rate for future dividends and (b) a single discount rate.
Harrod-Domar growth model
An economic model which maintains that the growth rate of GDP depends upon the level of savings and the capital output ratio.
Cost of sales
The costs associated with generating reported sales, including merchandise, direct labor, and other costs attributed to current sales activity.
Sales-type lease
An arrangement whereby a firm leases its own equipment, such as Acer leasing its own computers, thereby competing with an independent leasing company.
Sales forecast
A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors.
Sales charge
The fee charged by a mutual fund when purchasing shares, usually payable as a commission to marketing agent, such as a financial advisor, who is thus compensated for his assistance to a purchaser. It represents the difference, if any, between the share purchase price and the share net asset value.
Price/sales ratio
Determined by dividing current stock price by revenue per share (adjusted for stock splits). Revenue per share for the P/S ratio is determined by dividing revenue for past 12 months by number of shares outstanding.
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the equipment manufacturer or a bank or finance company to whom the manufacturer has sold the conditional sales contract.
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
