Glossary

List of Financial Terms

Acronym Expanded form Definition/explanatory note
“kd” Cost of debt Average cost of debt, measured as interest expense divided by average debt outstanding in a period
“t” Income tax rate Average tax rate applicable to the firm, measured as Tax provision divided by pretax profit for the period
ATR Asset turnover ratio Measures how well assets are utilized, calculated as revenues for the period divided by average operating assets employed. Higher the ratio, better is asset utilization.
Capex Capital expenditure Investment in long-term operating assets during a period, this is recorded in the cash flow statement
C-D ratio Credit-to-deposits ratio Ratio of loans and advances outstanding to deposits held ...

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