OVERHEAD RATE is calculated by totaling all your expenses for one year, excluding labor and materials, and then divide this number by your total cost of labor and materials.
ACCOUNTS PAYABLE TO SALES measures the speed with which a company pays vendors relative to sales. Numbers higher than typical industry ratios suggest that the company is using suppliers assets (cash owed) to fund operations.
FREE CASH FLOW is net income plus non-cash charges to income, specifically depreciation and amortization less capital expenditures, to sustain the basic business. Free cash flow per share is a measure of the amount of cash per share a business generates after expenditures for equipment or buildings. Free cash flow is available to be used for expansion, dividends, reduction in debt, or other purposes. Free cash flow is valued more than just about any other measure, including earnings (EPS). Cash assists companies to expand, develop new products, stock buy back, pay dividends, or reduce debt. Many analysts focus on free cash flow for insight into the core of a company's cash-generating engine.
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