Average Balance

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Dictionary Says

Definition of 'Average Balance'

The balance on a loan or depositary account. A simple average balance is calculated by dividing the beginning balance plus the ending balance by two.

A weighted average balance will take into account how long the balance remained at specific levels during the measurement period, which is typically a month or a financial quarter long. 
Investopedia Says

Investopedia explains 'Average Balance'

Average balance is more commonly used when referring to an average daily balance, particularly when charging interest on loans. Since banks are not permitted to charge interest on interest, any payments are applied first to interest payments due, and then to principal. 

For investors who trade on margin accounts, the average balance may be used to determine margin requirements or any margin calls that the brokerage makes.
Search results for

'Average Balance'

  • Analyzing A Bank's Financial Statements

    http://www.investopedia.com/articles/stocks/07/bankfinancials.asp
    ... The following table represents the same bank as in the previous examples:
    Figure 3: Average Balance and Interest Rates. First of ...

  • Exploring Oscillators and Indicators: On-Balance Volume ...

    http://www.investopedia.com/university/indicator_oscillator/ind_osc2.asp
    ... When the OBV crosses the 20-period moving average the divergence signal of a trend
    reversal is confirmed. The on-balance volume measure is one of the least ...

  • Financial Statements: Working Capital | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements6.asp
    ... The turnover ratios divide into an average balance because the numerators (such
    as sales in the receivables turnover) are flow measures over the entire year. ...

  • CFA Level 1 Study Guide - Microeconomics - Marginal and Average ...

    http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/marginal-average-total-cost-curve.asp
    ... 3.13 Modifying Output; 3.14 Marginal and Average Total Cost Curves; 3.15 Perfectly ...
    6.6 Income Statement: Non-recurring Items; 6.7 Balance Sheet Basics; 6.8 Balance ...

  • The Dow Jones Industrial Average

    http://www.investopedia.com/video/play/what-is-the-dow-jones-industrial-average
    Videos /. The Dow Jones Industrial Average. ... Outstanding Shares. Learn more about
    this important number found on a company's balance sheet. Read More »; ...

  • How To Evaluate A Company's Balance Sheet

    http://www.investopedia.com/articles/basics/06/assetperformance.asp
    ... consistency or increasing fixed asset turnover rates as positive balance sheet
    investment ... Average total assets can be calculated by dividing the year-end total ...

  • PNC Delivers A Surprisingly Average Quarter

    http://stocks.investopedia.com/stock-analysis/2012/PNC-Delivers-A-Surprisingly-Average-Quarter-PNC-WFC-MTB-C0120.aspx
    ... PNC Delivers A Surprisingly Average Quarter. ... Good Signs of Growth PNC did not have
    the calamitous credit problems of other banks and its balance sheet continues ...

  • Breaking Down The Balance Sheet

    http://www.investopedia.com/articles/basics/06/balancesheet.asp
    ... the income/cash flow statements (akin to a movie) it is more accurate, and is the
    practice of analysts, to use an average number for the balance sheet amount. ...

  • 3 Alternative Budgeting Styles: Which One Suits You?

    http://www.investopedia.com/articles/pf/09/alternative-budgeting-styles.asp
    ... account. Now add up the total bills that will be paid out of this income
    and determine the remaining average balance. Arrange with ...

  • Credit And Debt Management: Credit Cards | Investopedia

    http://www.investopedia.com/university/credit-debt-management/management4.asp
    ... One is more costly to you than the other, so it's worth being informed.
    The first method used is the average daily balance method. ...

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