Time Charter Equivalent - TCE

AAA

DEFINITION of 'Time Charter Equivalent - TCE'

A shipping industry standard used to calculate the average daily revenue performance of a vessel. Time charter equivalent is calculated by taking voyage revenues, subtracting voyage expense and then dividing the entire total by the round-trip voyage duration in days. It gives shipping companies a tool to measure period-to-period changes.

INVESTOPEDIA EXPLAINS 'Time Charter Equivalent - TCE'

The time charter equivalent is calculated as:


Voyage Revenues - Voyage Expenses
Round Trip Duration in Days


It can also be calculated on a per-day basis based on period, spot and weighted average.


TCE revenue is used as a measure of performance to track period-to-period changes, but is a non-GAAP measure. This means that regardless of how positive or negative the TCE revenue is, it can not be accepted as an account principle; however, companies may still choose to report it in the financial statements as a footnote.

RELATED TERMS
  1. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  2. Expense

    1. The economic costs that a business incurs through its operations ...
  3. Revenue

    The amount of money that a company actually receives during a ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Rate Of Return

    The gain or loss on an investment over a specified period, expressed ...
  6. Inherent Risk

    The risk posed by an error or omission in a financial statement ...
Related Articles
  1. Measure Momentum Change With ROC
    Active Trading

    Measure Momentum Change With ROC

  2. Evaluating A Company's Capital Structure
    Bonds & Fixed Income

    Evaluating A Company's Capital Structure

  3. Measure Your Portfolio's Performance
    Investing

    Measure Your Portfolio's Performance

  4. A Guide To Risk Warnings And Disclaimers
    Investing Basics

    A Guide To Risk Warnings And Disclaimers

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center