DEFINITION of 'Annual Basis'
The return earned by an investment over the course of a year. Projections containing the phrase "on an annual basis" have usually used less than a year's worth of data to project a full year's worth of returns. For example, an investment might have returned 1.5% in one month. By multiplying this return by 12, an 18% annual basis is the result. The shorter the period of data used to determine an annual return, the less accurate that projection is likely to be. Statements about what an investment will return on an annual basis are always estimates.
INVESTOPEDIA EXPLAINS 'Annual Basis'
Annual basis can also refer to the cost of something over the course of a year. For example, if Angela wanted to establish a household budget for the year and it was April 1, she could look at how much money her family had spent on groceries in January, February and March to estimate what her family's grocery costs would be on an annual basis. She sees that she spent $300 in January, $250 in February and $350 in March, for a total of $900. Since 25% of the year has passed, she multiplies $900 x 4 to determine that groceries should cost her family around $3,600 on an annual basis.

Compound Annual Growth Rate  CAGR
The yearoveryear growth rate of an investment over a specified ... 
Annualized Total Return
The average amount of money earned by an investment each year ... 
Basis
1. The variation between the spot price of a deliverable commodity ... 
Annual Turnover
The percentage rate at which a mutual fund or exchangetraded ... 
Annualized Rate
A rate of return for a given period that is less than one year, ... 
Semiannual
A semiannual event happens twice a year, typically every six ...

How does transfer pricing help business?
Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >> 
How do I calculate my effective tax rate using Excel?
Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >> 
How important are contingent liabilities in an audit?
Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >> 
How does quantifying fixed overhead volume variance show whether a company is profitable ...
Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >> 
What does inventory turnover tell an investor about a company?
The inventory turnover ratio determines the number of times a company's inventory is sold and replaced over a certain period. ... Read Full Answer >> 
What is a deferred tax liability?
A deferred tax liability is an account that is listed on a company's balance sheet and occurs when its taxable income is ... Read Full Answer >>

Fundamental Analysis
How To Calculate Your Investment Return
How much are your investments actually returning? Find out why the method of calculation matters. 
Investing
Measure Your Portfolio's Performance
Learn three ratios that will help you evaluate your investment returns. 
Fundamental Analysis
Gauge Portfolio Performance By Measuring Returns
Calculate returns frequently and accurately to ensure that you're meeting your investing goals. 
Investing
How To Evaluate Pension Risk By Analyzing Annual Costs
Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate. 
Economics
How to Do a CostBenefit Analysis
The benefits of a given situation or businessrelated action are summed and then the costs associated with taking that action are subtracted. 
Investing
The Case For Stocks Today
Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking. 
Mutual Funds & ETFs
Why You May Want To Be (And Stay) In Bonds
Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor. 
Fundamental Analysis
Calculating the HerfindahlHirschman Index (HHI)
The HerfindhalHirschman Index, (HHI) is a measure of market concentration and competition among market participants. 
Economics
What are Noncurrent Assets?
Noncurrent assets are property that a company owns that will last for more than one year. 
Investing
What More Volatility Means For Momentum Stocks
One byproduct of the recent tick higher in bond yields: a meaningful rise in volatility for both stocks and bonds.