Financial Calcs Definitions Flashcards
Capital Cost Allowance (CCA)
A tax deduction for the depreciation of eligible capital property.
Depreciation Expense
The allocation of the cost of a tangible asset over its useful life.
Cost of Goods Sold (COGS)
Direct costs attributable to the production of goods sold by a company.
Net Income
Total revenue minus total expenses when total revenue is greater.
Shareholders’ Equity
The residual interest in the assets of the entity after deducting liabilities.
Gross Rent Multiplier (GRM)
A measure used in real estate investing to compare properties and determine their value relative to their income.
Return on Investment (ROI)
A measure used to evaluate the efficiency or profitability of an investment.
Debt Service Coverage Ratio (DSCR)
A measure of a company’s ability to use its operating income to repay its debt obligations.
Operating Expense Ratio (OER)
The ratio of a property’s operating expenses to its gross operating income.
Cash on Cash Return
The rate of return on the actual cash invested in a property.
Amortization
The process of gradually writing off the initial cost of an asset.
Annual Percentage Rate (APR)
The annual rate charged for borrowing or earned through an investment, expressed as a percentage.
Value of Cash
The amount of cash included in total current assets.
Value of Machinery
The valuation of machinery as part of total non-current assets.
Total Non-Current Assets
The sum of all long-term assets not expected to be converted into cash within a year.
Share Capital
The amount of share capital included in shareholders’ equity.
Total Shareholders’ Equity
The sum of all equity investments made by shareholders, including retained earnings.
Total Liabilities and Shareholders’ Equity
The combined total of all liabilities and shareholders’ equity, equal to total assets.
Income Tax Expense
The amount of expense recognized for the government tax related to taxable profit.
Building’s Capital Cost Allowance (First Year)
The deduction for a building’s depreciation in the first year.
UCC (Undepreciated Capital Cost)
The remaining value of a depreciable property after accounting for the annual CCA.
Revenue
Total income generated by the sale of goods or services.
Operating Expenses
The costs required for a company to run its day-to-day operations.
Net Operating Income (NOI)
The income from a property after operating expenses are deducted.
Total Debt Service
The cash required for a specific period to cover the repayment of interest and principal on a debt.
Gross Operating Income
The total income from a property before any expenses are deducted.
Principal
The original sum of money borrowed in a loan or put into an investment.
Annual Pre-Tax Cash Flow
The amount of cash a property generates in a year before taxes.
Total Cash Invested
The sum of all cash put into an investment.
Debt Yield
The return a lender gets on their loan, calculated as the property’s NOI divided by the loan amount.
Break-Even Occupancy
The occupancy rate at which total income equals total expenses.
Gross Rent Multiplier (GRM)
A ratio used to evaluate the profitability of income-generating properties.
Effective Gross Income (EGI)
The total income from a property after accounting for vacancy losses and additional income streams.
Total Debt Service
The total amount of required payments on all debt over a specific period.
Loan-to-Value Ratio (LTV)
A financial ratio that compares the loan amount to the appraised value of the property.
Cost of Goods Sold (COGS)
The direct costs attributable to the production of the goods sold in a company.
Net Present Value (NPV)
Measures the profitability of a project by calculating the present value of expected future cash flows minus the initial investment.
Internal Rate of Return (IRR)
The discount rate that makes the NPV of all cash flows from a particular project equal to zero.
Current Ratio
Measures a company’s ability to pay short-term obligations with its current assets.
Quick Ratio (Acid-Test Ratio)
Measures a company’s ability to meet short-term obligations with its most liquid assets.
Debt-to-Equity Ratio
Measures a company’s financial leverage by comparing its total liabilities to its shareholders’ equity.
Return on Equity (ROE)
Measures a company’s profitability by revealing how much profit a company generates with the money shareholders have invested.
Earnings Per Share (EPS)
Measures a company’s profitability by calculating the portion of a company’s profit allocated to each outstanding share of common stock.
Price-to-Earnings Ratio (P/E Ratio)
Measures a company’s current share price relative to its per-share earnings.
Annual Depreciation Expense
The annual reduction in the value of an asset over its useful life.
Book Value of Building
The current value of a building after accounting for depreciation.
Unit Entitlement
The percentage of the entire strata lot area owned by a particular owner.
Monthly Share of Common Expenses
The monthly share of the annual common expenses owed by each strata lot owner.
Total Current Assets
The sum of all assets expected to be converted into cash within a year.
Total Non-Current Assets
The sum of all long-term assets not expected to be converted into cash within a year.
Total Shareholders’ Equity
The value remaining after all liabilities are subtracted from total assets.
Total Liabilities and Shareholders’ Equity
The sum of total liabilities and shareholders’ equity, which equals total assets.
Purchase Price of Building
The original cost of the building calculated based on its economic life and annual depreciation.
Remaining Depreciable Base or UCC
The remaining value of an asset eligible for capital cost allowance.
Total Non-Current Assets
Sum of all long-term assets not expected to be converted into cash within a year.
Total Shareholders’ Equity
Value remaining after all liabilities are subtracted from total assets.
Total Liabilities and Shareholders’ Equity
Sum of total liabilities and shareholders’ equity, which equals total assets.
Purchase Price of Building
Original cost of the building calculated based on its economic life and annual depreciation.
Remaining Depreciable Base or UCC
Remaining value of an asset eligible for capital cost allowance.
