How to Calculate the Book Value of a Stock

You can calculate the book value of a stock by using a simple formula. To calculate book value, use the balance sheet figures to determine the value of the company’s assets. Add up the asset and liability values. You can also consider depreciation. Regardless of which method you choose to determine the book valuation of a stock, you should always take it into consideration with other metrics before making a decision. Then, you’ll know the true worth of the company.

There are a couple of problems with the book value calculation. It ignores the intangible assets that companies have. While tangible assets such as real estate and equipment can be counted, intangible assets are more difficult to measure. For instance, a start-up designing apps could have a high market value due to the future potential of the industry, and the products that are sold. However, the book value of the business would be much lower. More on Harbourfront technologies

The book value is a more accurate indicator of a company’s value than market value. While market values are emotionally charged, book values are more objective. Rather than bidding on real estate or purchasing a new car, a company can easily estimate its book value. All the information that the public needs is available in a single report. For example, if a company’s book is not listed on the official financial statement, the buyer can view the book, but it is not always accurate.

One of the biggest problems with book value is that it can’t measure intangible assets. Intangible assets are those that are not directly tangible but are not listed on a company’s financial statements. Nevertheless, intangible assets make up the bulk of a company’s value. So, you should be aware of the limitations and advantages of book value analysis in order to properly judge the firm’s worth. You should take the time to understand how book value works before making your decision.

Book value is often used as a basis for comparing the market value of a company to its book value. The difference is often significant in the case of companies that are in the growth phase and have little tangible assets. Moreover, book values are less useful for companies that are in the process of acquiring new assets. In order to get the most accurate comparison, you should compare book values with the actual value of the company. This is especially important if the firm is a fast-growing technology company.

In addition, book value does not account for intangible assets. This is because firms are not required to record the intangible assets on their balance sheet. Those intangible assets are not considered to be assets on the balance sheet. Thus, you must make sure to consider intangibles when comparing a company’s book value with the market value. This will help you to compare a company’s overall value with its current worth.

How to Get a Floating Rate Note

When you hear the term floating rate note, it’s usually a bad idea. Such notes are financial products whose interest-bearing capacities are based on future expectations of economic activity. That means they are not tied to anything concrete; they’re more like future contracts. But what’s in a floating rate note? And how is it different from, say, a certificate of deposit (CD) for a particular time period?

Description Floating rate notes are financial securities whose interest-bearing capacity is determined by a future date, typically in the near future. The note’s interest rate is subject to changes in fundamental factors, such as current economic conditions and interest rates in various countries. Most floating notes are global in nature. In general, the more volatile the interest rate in any given country, the higher the floating note’s risk/value.

Interest Rate Swaps If a certain country’s interest rates rise above a certain level, then the companies lending money in that country will need to pay more than usual in order to borrow from other lending institutions. If there is little or no inflation, the companies’ profits will decrease since they will be unable to increase their costs of production. At the same time, currency depreciation can reduce the value of a floating note. That’s why companies holding these notes are always interested in exchange rates and any potential changes in the global economy. These companies use floating notes as collateral for their financial transactions.

Security Features a good feature of a floating note is that its interest rates, when compared to those of other financial instruments, are very flexible. This means that investors can choose whether to take their chance in the global markets or stick with their local currencies. This feature allows investors to capitalize on fluctuations in the global markets. The rates can also be determined according to factors that are within the control, which makes it easier for the issuer of the floating note. This is an advantage for those who need to get the money quickly.

Risk-Free Interests One of the risks of holding a floating note is that you have high risks of getting an early redemption if interest rates fall. If the company issuing the note starts paying interest only at a low-interest rate, the borrower has no room to negotiate because he won’t receive any extra money after the company pays all interest. However, if the company offers high interest, the borrower can benefit by purchasing a convertible bond where he can convert his notes into cash when interest rates go up because of interest rate swap tax treatment.

You May Also Find This Kind Of Note Obtaining: If you’re a company that wants to use a floating note as capital for buying shares or property, you may find this kind of note beneficial. It helps you secure your funding without having to provide security by offering real estate. While it will be less liquid than most other types of bonds, it’s still fairly valuable and worth looking into. In fact, the company issuing the note may prefer to issue the bond as a whole instead of selling individual notes so that the rates can remain competitive.

Different investment options have varying amounts of risks

It is undeniable that a lot of business stops their operations because the income from the business is no longer enough to sustain the expenses it incurs. In some cases though, you can also several businesses cease operations even when it generates enough income simply because the business owner had decided to get involved in another business. And in some even rarer cases, the business stops operations because there was an offer from the competitor to buy out the shares so that they will become the market leader. If you do encounter this situation, it is important conduct a cost-benefit evaluation about whether it the offer is financially viable.

There are still many other reasons why a business ceases to operate but in a franchise business, the reason for quitting is usually quite common. Some of the reasons that franchise owners cite is the high cost of the royalty fee they have to pay together with the cost of doing the actual business. In addition, there are the overhead expenses, the rental fees, the salary, and the miscellaneous expenses a franchise has to deal with. And while other businesses encounter the same problems, a franchise usually incurs more expenses because they have to buy the products they sell from a specific source; this limits their ability to take advantage of cheaper alternatives.

Some of these opportunities include investing in the stock market, in mutual funds, and even in foreign exchange. But from the description of these options, it is quite obvious that it is necessary for you to watch the movements of the market consistently so you will be able to know when to buy and when to sell.

However, you should note that just in operating your own business, investing in these endeavors presents risks also. Different investment options have varying amounts of risks so you need to study how much risk you are actually willing to take. For example, if you decide to buy a particular stock from a known company at a high price, it is possible that this stock will not cost the same the following day because of management problems or other issues that can suddenly arise. Even investing in mutual funds carries some risks because the interest rates you are expecting may not be as high as you are anticipating.

Overall though, investment is a good way to earn while enjoying the convenience of being in control of your time and your money. Investments also somehow provide you with a sense of security because you know that your money is managed by competent financial managers. In addition, you should note that diversification is important in today’s world. Diversification simply means that you need to put money in different investment options so your risks are balanced in different industries. In this regard, investments certainly gives you that flexibility because you are free to choose the investment medium that suits your needs best.

ETFs in the first half: Records across the board

ETFs enter the second half of the year with record inflows of $247 billion and record assets under management of $2.971 trillion. Inflows have been positive for 16 straight months.

June saw the continuation of many of the big trends for the year. The biggest inflows remain in plain-vanilla assets such as S&P 500 and Russell 2000 funds, but big money has also been flowing into international and emerging market funds.

ETFs: June biggest inflows

iShares Core S&P 500

iShares Russell 2000

Vanguard Europe

iShares Emerging Markets

Source: etf.com

What about smart beta? It’s been a media darling, with tons of hype, but it isn’t attracting investor interest. “You can’t go in a subway without seeing an ad for a smart beta fund, but not a single smart beta has cracked the top 75 in terms of flows,” Dave Nadig, CEO of ETF.com, told me.

For the year so far, money is still going into U.S. equity and U.S. fixed income ETFs, but a lot of investors have moved money into overseas funds. International and fixed income both saw strong inflows.

ETFs 2017: Where the money is going

(increases in AUM)

US Equity up 4.8%

US Fixed Income up 12.3%

International Equity up 13.7%

International Fixed Income up 21.4%

Source: etf.com

But there are signs momentum is starting to shift against the tech sectors. In June, there were outflows from the main NASDAQ 100 ETF (QQQ), and we saw particularly large outflow from a semiconductor ETF (SMH). Gold miners also saw outflows.

As for who is getting the money the big guys keep getting bigger. While there are north of 70 ETF providers, the Big Four (BlackRock, Vanguard, State Street and Invesco PowerShares) together control 88 percent of the total assets under management of the ETF business.

ETFs: the big guys

(AUMs)

BlackRock $1.17 trillion

Vanguard $734 billion

State Street $540 billion

Invesco PowerShares $124 billion

Source: etf.com

Not only are the biggest fund companies getting bigger, so are the funds themselves. There are more than 2,000 ETFs in the United States, but most of the assets are in the top 100:

ETFs: where’s the money?

(% of assets under management)

Top 30 50%

Top 100 75%

Finally, there is evidence that investors are VERY sensitive to fees, down to levels that seem, well, kind of trivial. As an example, take two funds that are essentially identical: the iShares Core S&P 500 and the SPDR S&P 500.

Both own the S&P 500. But the IVV charges 4 basis points a year. It’s had $16.8 billion in inflows this year.

The SPY charges 9 basis points a year. It’s had OUTFLOWS of $5.6 billion.

Huh? Investors are moving money around for a 5 basis point difference? Just to give you an idea of what I’m talking about, 5 basis points is $0.50 a year for a $1,000 investment. That’s $500 for a $1,000,000 investment. Investors are that sensitive?

“The attitude is, ‘It’s $500 of free money,” Nadig told me. “If you have $1 million in a fund, and you can save $500 a year just by transferring it to a different fund that does the same thing, why shouldn’t you?”

Finally, what about the big debates about passive vs. active management? “It’s not so much about active versus passive, it’s about lower costs,” Nadig told me, and passive funds are cheaper than active, even in ETF land.

And the much-debated issue that too much money is going into passive ETFs? Nadig has two responses: “One, we’re seeing a lot of growth in actively managed ETFs, so if you’re worried about nobody derivative valuation getting the price of Google right because there are no active traders, I think you’re seeing that happen in ETFs, and I think that’s healthy.

“The other thing is, ETFs only own 6 percent of U.S. equities. That’s a pretty small number compared to, say, 401(k) plans.”

http://www.cnbc.com/2017/06/30/etfs-records-inflows-indexes.html

From Yelp reviews to mango shipments: IBM’s CEO on how blockchain will change the world (IBM)

IBM Chief Executive Ginny Rometty.IBM

IBM has received more patents than any other company for the past 24 years. First it was cloud computing, then artificial intelligence. Now, the software giant wants to stay on top for a 25th year with blockchain.

CEO Ginni Rometty, who also sits on President Trump’sAmerican Technology Council,explained the software giant’s blockchain investments and patentsto CNBC’s Jim Cramer.

“What the internet did for communications,” said Rometty, “I think blockchain will https://optionvolatilityandpricing.tumblr.com/post/162241222352 do for trusted transactions.”

She said there are countless examples of where a secure, shared ledgercan save businesses time and money. In shipping, blockchainreplace mountains of paperwork. “On a cargo ship, the paperwork costs more than just even the goods inside of it,” said Rometty.

IBM has been working with retailers like Walmartand Maersk to track everything from food safety, to pork production in China, and even mango shipments.

Instead of every single party manufacturer, shipper, buyer and any other intermediary all relying on their individualpaperwork to track a a shipment from beginning to end, the blockchain would allow all stakeholders to see every step inan open, secure ledger. It’s the same technology that powers cryptocurrencies like Bitcoin.

IBM’sblockchain patents could even help fish out fake Yelp reviews.

For example, the company was awarded a patent last month for “consensus-based reputation tracking in online marketplaces.” The system would allow two verified users to endorse one another after a digital transaction, and block anyone else. Think of it like rating your Uber driver, but without any offlineinteraction.

The only way for decentralized technology like blockchain to take off is for a multitude of companies to adopt it, so IBM is open-sourcing many of its blockchain advancements, according to Rometty.

“Greatness isn’t having a technology,” said Rometty. “But the know how to do something with it.”

Get the latest IBM stock price here.

http://www.businessinsider.com/ibm-ceo-ginni-rometty-blockchain-transactions-internet-communications-2017-6