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Equities & Finance Glossary – Terms Starting with R
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Terms Starting with R
R2 for Exchange Traded Funds A measurement of how closely the portfolio's performance correlates with the performance of the S&P 500 benchmark index for equity Exchange Traded Funds (ETFs), the Lehman Brothers Aggregate Bond Index as a benchmark for fixed income ETFs, and the MSCI EAFE for international equity ETFs. R2 is a proportion which ranges between 0.00 and 1.00. An R2 of 1.00 indicates perfect correlation to the benchmark index, that is, all of the portfolio's fluctuations are explained by performance fluctuations of the index, while an R2 of 0.00 indicates no correlation. Therefore, the lower the R2, the more the ETF's performance is affected by factors other than the market as measured by that benchmark index.
Rate of Change (ROC) An indicator measuring a security's percentage change in price over rolling 10-bar time periods. The default setting is 10 bars.
Ratings Designations used by investors' services to give relative indications of credit quality.
Ratings Performance (%) Percentage return on a rating.
Receivables Turnover Total revenue divided by average accounts receivables for a specified time period. Time periods measured include:
Most Recent Quarter (MRQ) as an annualized figure Trailing Twelve Months (TTM) Receivables Turnover is helpful in determining how efficiently as a company extends and collects on credit. The higher Receivables Turnover, the more likely the company is to operate on cash only, or quickly extends and receives payment for credit.
Recognia Technical analysis charts is a recognized leader in the field of chart pattern recognition and price forecasting. Recognia's pattern recognition technology can recognize patterns in the price chart of any publicly traded stock.
Relative Strength Index (RSI) A momentum indicator measuring an equity's price relative to its past performance. Depending solely on the changes in closing prices, RSI indicates a security's internal strength and quantifies price momentum. RSI is less affected by sharp rises or drops in a security's price performance, and thus gives a better velocity reading than other indicators.
RSI is calculating by dividing the average of the closes of the up bars by the average of the closes of the down bars. The timeframe specified determines the volatility of the indicator. For instance, a nine-day time period under study will be more volatile than a 21-day time span. The RSI ranges between 00 and 100. RSI is said to indicate an overbought condition above 80 and an "oversold" condition below 20. However, the buy and sell level varies depending on the amount of bars used in the calculation:
A shorter span of bars results in a more volatile indicator which reaches further extremes. A longer span of bars results in a less volatile reading which reaches extremes less often. By default, the RSI indicator is 14 bars.
Relative Volatility A ratio of a portfolio's standard deviation to the standard deviation of a benchmark index. See Volatility Measures.
Return The results of an investment over a period of time.
Return After Taxes on Distributions for Exchange Traded Funds Return After Taxes on Distributions are adjusted for federal income taxes associated with Exchange Traded Fund (ETF) distributions but do not reflect the federal income tax impact of gains or losses recognized when ETF shares are sold. These returns assume that an investor continued to hold shares for the purposes of reflecting the federal income tax impact of sale of ETF shares. The highest federal tax rate is applied for these adjustments. Contact your tax advisor for information about your particular situation.
Return After Taxes on Distributions and Sale of Exchange Traded Fund Shares Return After Taxes on Distributions and Sale of ETF Shares are adjusted for federal income taxes associated with Exchange Traded Fund (ETF) distributions and reflect the federal income tax impact of gains or losses recognized when ETF shares are sold. The highest federal tax rate is applied for these adjustments. Contact your tax advisor for information about your particular situation.
Return Before Taxes for Exchange Traded Funds A measure of an Exchange Traded Fund's (ETF's) performance over a given time frame before accounting for the effect of taxes. Dividends generated by, and distributions made on, an investment, as well as gain or losses recognized upon sale of an investment, may be taxable. Taxes may reduce the value of the dividend, distribution or sale proceeds in the hands of the investor. As each investor's tax situation may differ, return before taxes provide a valuable benchmark against which an investor can easily compare the return before taxes of other investments without regard to tax consequences.
Return on Assets (ROA) Return on Assets measures the relationship between company profits generated and assets that were used to generate those profits. It tells business owners whether they are earning a worthwhile return from the wealth tied up in their companies. In addition, a low ratio in comparison to other companies may indicate that your competitors have found ways to operate more efficiently.
ROA is calculated by dividing Net Income Before Taxes by Total Assets for a specified period. Time periods measured include:
Most Recent Quarter (MRQ) as an annualized figure Trailing Twelve Months (TTM)
Return on Equity (ROE) Return on Equity measures how well a company uses reinvested earnings to generate additional earnings. ROE is calculated by dividing a company's after-tax income by Shareholder's Equity for a specified period, expressed as a percentage. Time periods measured include:
Most Recent Quarter (MRQ) as an annualized figure Trailing Twelve Months (TTM)
Return on Investment (ROI) Return on Investment measures how effectively a company uses its capital to generate profit. ROI is calculated by dividing income by common stock and preferred stock equity plus long-term debt over a specified time period. Time periods measured include:
Most Recent Quarter (MRQ) as an annualized figure Trailing Twelve Months (TTM) Past 5 years
Return on Sales (ROS) Return on Sales is often used by management to monitor operational efficiency. When viewed over time, an increase in ROS indicates a company is growing more efficient, while decreases could signal operational issues. ROS is calculated by dividing a company's net income by Total (or Gross) Sales, also known as a company's Operating Profit Margin. Time periods measured include:
Most Recent Quarter Annualized Trailing Twelve Months (TTM)
Returns In a watch list, the average load-adjusted return over the time periods shown (e.g., YTD, 1 Yr). If the fund has not been in existence for the full time period, the average return for the life of the fund is displayed. Returns are updated monthly.
Revenue Total goods and/or services sold by a company (also referred to as Total Net Sales) during a specified time period. Revenue is a result of the normal operations of the company. In cases where a divestiture or sale has occurred, the effect of the transaction would also be reflected in revenue. Revenue is measured in Trailing Twelve Months (TTM).
On its own, revenue is a measure of size only, and possibly of industry leadership.
Revenue Growth A measure (percent) of how much more (or less) the company has sold during a specified time period. Time periods measured include:
Last Quarter vs. Same Quarter Prior Year Trailing Twelve Months (TTM) vs. Prior TTM Last 5 Years Use Revenue Growth to find companies that are growing quickly by selling more, but that might not be seeing the accompanying growth in earnings. For quarterly comparisons, be sure that the companies you review are not seasonal. If they are, be sure they share the same seasonal or cyclical pattern as the other companies you are evaluating.
Revenue Per Employee A measure of the efficiency of the company as a whole. Revenue Per Employee is calculated by dividing the total goods and/or services sold by a company (also referred to as Total Net Sales) by the total number of employees. The higher the Revenue Per Employee, the more efficient the operation, and therefore the more sustainable and profitable. Revenue Per Employee should only be used to compare companies in the same industry.
Rolling Dividend An indicator plotting a stock's or mutual fund's rolling 52-week dividend as dollars per share. Rolling Dividend appears when a company or mutual fund raises or lowers the dividends it pays to shareholders.
Rolling EPS An indicator plotting a stock's 12-month rolling earnings over the specified time period.
Russell 1000® Growth Index An unmanaged, market capitalization-weighted index of those stocks of the 1,000 largest U.S. domiciled companies that exhibit growth-oriented characteristics.
Russell 1000® Index The largest 1,000 companies in the Russell 3000® Index. This unmanaged index represents the universe of large capitalization stocks from which most active money managers typically select. The Index was developed with a base value of 130.00 as of December 31, 1986.
Russell 1000® Value Index An unmanaged, market capitalization-weighted index of those stocks of the 1,000 largest U.S. domiciled companies that exhibit value-oriented characteristics.
Russell 2000® Index An unmanaged, market capitalization-weighted index measuring the performance of the smallest 2,000 companies in the Russell 3000 index.
Russell 2000 Growth An unmanaged index that measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.
Russell 2000 Value An unmanaged index that measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
Russell 3000® Index An unmanaged, market-capitalization weighted index measuring the performance of the 3,000 largest US companies based on total market capitalization. The Russell 3000 represents approximately 98% of the U.S. equity market. In order to provide a comprehensive, unbiased, and stable barometer of the broad market, the Russell 3000 is reconstructed every year to account for new and quickly growing equities.
Russell Midcap Index An unmanaged index that measures the performance of the 800 smallest companies in the Russell 1000® Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index.
Russell® Midcap Growth Index An unmanaged, market capitalization-weighted index of the smallest 800 companies included in the Russell 1000® Index that exhibit growth-oriented characteristics. The Russell 1000 Index is comprised of the 1,000 largest U.S. domiciled companies.
Russell® Midcap Value Index An unmanaged, market capitalization-weighted index of the smallest 800 companies included in the Russell 1000® Index that exhibit value-oriented characteristics. The Russell 1000 Index is comprised of the 1,000 largest U.S. domiciled companies.
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