A&A Definitions

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Audit & Assurance Portal - Definitions

10 YEAR GOVERNMENT BOND RATE

Government Bonds are medium to long-term debt securities issued by the Australian Government that carries an annual rate of interest fixed over the life of the security, known as the Coupon Interest Rate

52 WEEK HIGHLOW

The highest and lowest prices at which a stock traded during the previous year. Many traders and investors view the 52-week high or low as an important factor in determining a stock's current value and indicating possible future price movements.

ASX A-VIX

The ASX S&P 200 VIX (A-VIX) is a real-time volatility index that provides investors, financial media, researchers and economists an insight into investor sentiment and expected levels of market volatility.

ASX S&P 200

The ASX S&P 200 index is a market-capitalization weighted and float-adjusted stock market index of Australian stocks listed on the Australian Securities Exchange from Standard & Poor's.

BETA

A measure of an asset's risk relative to the market as a whole. If a company has a beta of 1.5, its excess return (over and above a risk-free rate) is expected to move 1.5 times the market excess return. According to one asset pricing theory, beta represents the systematic (or market) risk that cannot be diversified away by holding a large number of different shares.

CASH RATE

The cash rate is the interest rate charged on overnight loans between banks. Australia uses an explicit inflation target, which in the past has been around 2 to 3 percent a year.

CUMMULATIVE MENTIONS

Social mentions is the cumulative total number, or volume, of social mentions over the last 4 weeks. A mention is the text or tagged inclusion of a monitored keyword (company name or brand) in a post on a social media platform.

CUMMULATIVE REACH

Social reach is the cumulative social reach over the last 4 weeks. Social reach is defined as the total audience reached across all relevant social media networks for a particular keyword (company name or brand).

DEPOSIT TO TOTAL LIABILITIES

A measure of Deposit Liabilities to Total Liabilities of company as a percentage. (This is calculated only for banks).

DJIA

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.

EARNINGS PER SHARE

The company's net profit after tax divided by the fully diluted number of shares outstanding, calculated for the latest trailing twelve months (TTM).

EARNINGS QUALITY

A measure of how much reported accounting profit is converted into actual cash flow within the company. Calculated as cash flow divided by net profit. At 100% all the accounting profit is converted to cash flow. A ratio of 80% means only 80% is converted to cash flow and the earnings could therefore be considered of a lower quality.

EARNINGS YIELD

A percentage measure of the return the company is making, based on its after-tax earnings and the current share price. Calculated as earnings per share divided by the price per share. Higher earnings yields can be interpreted as representing higher returns for an investment at the current share price.

ENTERPRISE VALUE TO EBIDA

This ratio expresses the Enterprise Value of a company, which is the market value of equity plus total debt minus cash, divided by the pre-tax earnings before adjustments for interest, depreciation, and amortization. It represents the total value if the business as a multiple of its EBITDA, and a higher ratio is often thought to offer a relatively more attractive investment by some investors.

FED FUNDS RATE

The federal funds rate is the interest rate banks charge each other on loans used to meet reserve requirements.

INFLUENCER

Social influence is defined by the aspects which provide individuals with the power to influence others within their social sphere. The foundational attributes which determine influence potential are: reach, resonance and relevance. Influencer identification is based on individuals or entities with the greatest social influence across key channels.

INTEREST COVER RATIO

A measure of the company's earnings relative to the cost of its debt. Calculated as the cash operating earnings before interest and tax divided by the annual interest expense. A higher number can indicate the company is in a better position to service its debt under different scenarios.

LEVERAGE RATIO

A measure of the amount of debt the company has divided by the market value of its equity plus its debt (less cash), or enterprise value. Other factors being equal, lower leverage in a company's capital structure can mean lower financial risk for investors.

MARKET CAPITALIZATION

The total dollar value of all shares outstanding. Calculated as shares times current market price. Market capitalization is a measure of corporate size in terms of its equity.

MEDIA COVERAGE

Media Coverage is an index that measures current media coverage compared to the last thirty days. Coverage of 50% is on average, 30% is a sizable drop in coverage, and 70% means a big boost in attention.

MEDIA COVERAGE PANEL

Media Coverage is an index that measures current media coverage compared to the last thirty days. Coverage of 50% is on average, 30% is a sizable drop in coverage, and 70% means a big boost in attention. This panel shows the companies currently with the top media coverage and with a market cap of $200M+.

MEDIA PUNCH

Media Punch graphically displays social media's relationship to the share price. It is a rolling 5-day correlation of % share price changes against change in media heat. It is represented between -100% and +100%. A positive number means that media heat and share price move in the same direction, while negative numbers mean they move in opposite directions. The closer to +/- 100% Media Punch is, the more influence they have over each other.

MENTION SOURCE

Social sources are defined by the different kinds of social media platforms and channels across which social media activity can be measured.

NASDAQ

The Nasdaq Stock Market is an American stock exchange.

PE GROWTH RATIO

Calculated as the P/E ratio divided by the earnings growth rate times 100. Some analysts believe this is a better measure than just the P/E ratio and can indicate a company is possibly undervalued (PEG less than 1) or overvalued (PEG greater than 1).

PE RATIO

Current stock price divided by trailing annual earnings per share. If a stock sells for $25.50 per share and has earned $2.55 per share this year, then it has a trailing P/E ratio of 10 ($25.50 / $2.55 = 10). This means the stock is currently selling for ten times its earnings. Other factors being equal, investors may regard companies with lower P/Es to be relatively less expensive.

PRICE PERFORMANCE

The percentage of historical price return over a period of time from holding the share, not including any dividends that may have been paid. Calculated by dividing the current share price by the share price at the beginning of the period, minus one.

PRICE TO BOOK

This ratio describes the relationship between the share price and the company's contributed accounting equity (plus retained earnings). Calculated as the price per share divided by the book value of equity per share. Other factors being equal, a lower price to book ratio can indicate a more attractive investment, according to some investors.

PRICE TO CASHFLOW

A measure of the current share price as a percentage of the cash flow per share generated by the company. Calculated as cash flow per share divided by the current market price per share. A lower ratio is often thought to represent a more attractive investment by some investors.

PRICE TO EBITDA

A measure of the price of a company as a percentage of its EBITDA value. Calculated as market capitalization divided by EBITDA of company. (This is calculated only for companies which are neither banks nor insurance companies).

PRICE TO NET INTEREST INCOME

A measure of the price of a company as a percentage of its net interest income. Calculated as market capitalization divided by net interest income of company. (This is calculated only for banks).

PRICE TO OPERATING INCOME

A measure of the current share price as a percentage of the Operating Income generated by the company. Calculated as the share price divided by the Operating Income per share. A lower ratio is often thought to represent a relatively more attractive investment by some investors.

PRICE TO REVENUE

A measure of the price per share of the company as a percentage of its revenue per share. Calculated as market capitalization divided by revenue. A lower ratio is often thought to represent a more attractive investment by some investors.

REGULATORY CAPITAL RATIO

Banks are required to hold a minimum prescribed amount of capital to support their balance sheets. This ratio is calculated by taking the bank's total available qualifying capital (across two tiers) and dividing by its total assets.

RETURN ON ASSETS

A measure of how productive the company's assets are in producing its earnings. Calculated as the earnings divided by the book value of assets of the company. A higher return on assets is often thought by investors to indicate a more efficient and profitable company.

RETURN ON EQUITY

A measure of how productive the company's contributed equity is in producing its profit. Calculated as earnings divided by the book value of equity of the company. A higher return on equity is often thought by investors to indicate a more profitable company.

REWARD TO VOLATILITY

A measure of the percentage return the share has delivered for investors, divided by its volatility. If the 3-month return for a share is 5%, and its 3-month volatility is 10%, its reward to volatility ratio will be 5% / 10% = 0.5. The higher this ratio, the more reward a share has provided investors in the past for the volatility risk incurred while holding it.

S&P 500

The Standard & Poor's 500 Index (S&P 500) is an index of 500 stocks seen as a leading indicator of U.S. equities and a reflection of the performance of the large cap universe. In order to be part of the S&P 500 Index, companies must meet criteria’s such as a minimum market capitalization.

SENTIMENT

Sentiment is an index between 0% & 100% that employs a statistical technique to estimate the proportion of “buyer initiated” transactions (rather than “seller initiated” transactions) in a shares’s daily traded volume. This proportion is averaged over 3 days and may be an indicator of the relative market sentiment for a stock based on whether it is the buyers or the sellers that are dominating the transaction volume. 50% means the share has an equal balance of buyer & seller initiated transactions, indicating a neutral sentiment, while a higher sentiment than this means that there are more buyer initiated transactions.

SOCIAL MEDIA

Social Media is an index that measures current blogs and twitter coverage compared to the last thirty days. Social Media of 50% is on average, 30% is a sizable drop in coverage, and 70% means a big boost in attention.

SOCIAL MEDIA PANEL

Social Media is an index that measures current blogs and twitter coverage compared to the last thirty days. Social Media of 50% is on average, 30% is a sizable drop in coverage, and 70% means a big boost in attention. This panel shows the companies currently with the top social media and with a market cap of $200M+.

SOCIAL PUNCH

Social Punch graphically displays social media's relationship to the share price. It is a rolling 5-day correlation of % share price changes against change in social heat. It is represented between -100% and +100%. A positive number means that social media and share price move in the same direction, while negative numbers mean they move in opposite directions. The closer to +/- 100% Social Punch is, the more influence they have over each other.

VIX

The CBOE's Volatility Index, known by its ticker symbol VIX, is a popular measure of the implied volatility of S&P 500 index options.

VOLATILITY

Investors may often use this as a measure of an asset's absolute investment risk. Calculated as the annual standard deviation of the percentage daily price changes. The higher the volatility, the more the share price moves up and down, and the more uncertain (riskier) returns may be.

Published: February 2019

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