The Compound Annual Growth Rate (CAGR) represents the mean annual growth rate of an investment over a specified period of time longer than one year.
The Compound Annual Growth Rate (CAGR) is a useful measure of the growth rate of an investment or value over a specific period of time, assuming the gain was compounded annually. It's an invaluable tool for comparing the historical performance of investments or predicting future growth.
Discounted Cash Flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. This technique incorporates the time value of money by discounting the future cash flows to present value.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a common measure used to evaluate a company's operating performance by focusing on the earnings generated from its core business operations.
The Income/Expense Ratio in real estate measures the relationship between a property's operating income and its operating expenses, providing investors insights into financial performance.
The Inwood Annuity Factor is a number used to determine the present value of a series of equal periodic payments from a level payment income stream, considering a specific interest rate.
Inwood Tables provide a set of annuity factors used for calculating the present value of an annuity based on various interest rates and maturity periods. These tables are instrumental in real estate and financial analysis.
The Loan Constant, also known as the Mortgage Constant, is used to analyze the burden of debt repayment on a property and measure its ability to generate earnings sufficient to cover mortgage payments.
A nonperforming loan (NPL) is a loan for which the borrower is not making interest payments or repaying any principal. This typically occurs when payments are more than 90 days past due or the maturity date has already passed without full repayment.
The Payback Period is the amount of time required for cumulative estimated future income from an investment to equal the amount initially invested. It is used to compare alternative investment opportunities.
Pretax income refers to the amount of income that a business or individual earns before any income taxes are deducted. This figure is crucial for determining the net profitability of operations and for financial analysis.
Reversionary Factor is the mathematical factor that indicates the present worth of one dollar to be received in the future. It is often used in financial calculations related to real estate investments and valuations.
The risk premium is the difference between the required interest rate on an investment and the rate on risk-free investments such as U.S. Treasury securities. It compensates investors for taking on higher risk compared to risk-free assets.
