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Earnings before interest after taxes (EBIAT) |
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Earnings before interest after taxes (EBIAT)A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest plus cash income taxes. Equivalent to EBIT minus cash taxes.Earnings before interest after taxes (EBIAT) Similar MatchesPrice earnings growth factorPrice earnings growth factorThe PEG of a company is calculated by dividing its prospective P/E ratio by the estimated future growth rate in earnings per share of the company. So to calculate a PEG, you first need to calculate its P/E ratio.P/E = current share price divided by earnings per shareA company with a share price of 100p and earnings per share of 5p has a P/E ratio of 100/5 = 20.By itself the P/E ratio is a useful ratio because it shows how many times the current earnings the shares cost - in a sense, how many years you would have to wait to get your money back if the company paid out all its earnings to shareholders. But the limitation of the P/E ratio is that it looks at historical information and does not relate the price of the shares to its future performance. The PEG ratio builds in that extra layer of sophistication.Using the example of the same company, imagine that the consensus brokers' forecast for its future earnings growth rate is 15%.PEG = P/E divided by estimated future growth rateFor this company, the PEG would be 20 divided by 15 = 1.33.According to Jim Slater, the investor who popularised the use of PEG's as a stock share selection tool, a share with a PEG of 1 or lower is attractive. Put simply, the lower the PEG, the less you are being asked to pay for estimated future earnings. Jim Slater did not recommend use of the PEG as the only criteria of share selection. There are plenty of other fundamental checks that have to be made too.Note that the estimated future earnings are a critical part of the PEG calculation, and that if the forecasts made by brokers are wide of the mark, the PEG ratio will be unreliable. Because of this danger, most advocated of PEG's recommend using consensus forecasts, rather than the forecasts of any single broker/analyst. Earnings response coefficientEarnings response coefficientA measure of relation of stock returns to earnings surprises around the time of corporate earnings announcements. Earnings factorEarnings factorThis is a theoretical earnings figure that is used for working out state pensions or guaranteed minimum pensions. EarningsEarningsThe total amount earned, usually by a worker as wages, or by a firm as profits. Fully diluted earnings per sharesFully diluted earnings per sharesEarnings per share expressed as if all outstanding convertible securities and warrants have been exercised. Further Suggestionstaxable earningsNormalized earnings Retained earnings net relevant earnings Quality of earnings upper earnings level Earnings momentum Earnings earnings cap Earnings before interest, taxes, depreciation, and amortization (EBITDA) Pretax earnings or profits Accounting earnings retained earnings normalised earnings Earnings yield Earnings before interest, taxes, and depreciation (EBITD) earnings yield price earnings ratio (P/E ratio) Primary earnings per (common) share State Earnings Related Pension Scheme adjusted earnings Earnings price ratio Earnings before interest and, taxes (EBIT) earnings per share lower earnings limit |
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