Investopedia

Continue to Site »

Owner Earnings Run Rate

Filed Under » ,
Dictionary Says

Definition of 'Owner Earnings Run Rate'

An extrapolated estimate of an owner's earnings (free cash flow) over a defined period of time (typically a year). This assumes that the firm's financial performance stays consistent throughout the period. Therefore, this estimate can be difficult to assess if the firm is operating in a business that experiences seasonality, because owner earnings from one period may not be applicable across the entire time period.
Investopedia Says

Investopedia explains 'Owner Earnings Run Rate'

For example, after three quarters of performance, the company's owner earnings is $9 million. Assuming that performance stays consistent, the company's owner earnings run rate for the fiscal year would be $12 million ($3 million per quarter).

Owner earnings is often an important metric that investor's can use to gauge a firm's financial health. Increased owner earnings tend to act as a signal that a company's subsequent earnings will be good. Therefore, assessing an accurate owner earnings run rate could be very important in predicting the company's longer term performance.

Articles Of Interest

  1.

    Analyze Cash Flow The Easy Way

    Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.

  2. The Essentials Of Corporate Cash Flow

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.

  3. Free Cash Flow: Free, But Not Always Easy

    Free cash flow is a great gauge of corporate health, but it's not immune to accounting trickery.

  4. Market Summary For May 17, 2013

    The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators.

  5. Market Summary for May 10 2013

    Major U.S. indices moved higher this week but, given the new highs, traders should watch for retracements next week.

  6. Overheated Expectations Send Rackspace Investors To The Torture Chamber

    Absent a real competitive moat, it's hard to make sense of Rackspace's valuation.

  7. Buying The Upward Trend Channel Bounce

    Find out how to set up the trades for four stocks that are moving higher within well-defined trend channels.

  8. Johnson Controls Has A Lot Of Improving Left To Do

    Analysts are projecting a big turnaround in Johnson Controls' margins, but that the downside risks are meaningful

  9. Market Summary for May 3 2013

    The U.S. stock market extended its rally higher this week, led by technology stocks and lagged by small-cap stocks. Traders should be watching a number of other reports due out next week.

  10. Specific Stocks "Hammering" Out a Bottom

    A Hammer candlestick pattern can signify a turn-around in a stock, marking the shift from a downtrend to an uptrend. Here's how to indentify the signal, along with four stocks which may be hammering ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center