Glossary of Investment Terms

Earned Surplus—see Retained Earnings.

Earnings—see also Net Profit. A company's total profit before nonrecurring gains or losses, but after all other expenses.

Earnings Per Share—net profits attributable to each common share as originally reported by the company, but adjusted for all subsequent stock splits and stock dividends; may be based on weighted average shares outstanding (Basic EPS) or weighted average shares including all shares reserved for conversion of convertible securities (Diluted EPS). Annual and quarterly earnings per share figures on the Value Line page exclude nonrecurring or one-time gains and losses, which are noted in the footnotes.

Earnings Per Share (Bank Industries)—net profit after taxes, expressed on a per-share basis as reported by the company. Includes investment securities gains and losses after 1982.

Earnings Per Share Sensitivity to Change in Loss Ratio (Insurance [Property/Casualty] Industry)—the degree to which earnings per share will be affected by a one percentage point change in the insurance company's loss ratio.

Earnings Predictability—a measure of the reliability of an earnings forecast. Predictability is based upon the stability of year-to-year comparisons, with recent years being weighted more heavily that earlier ones. The most reliable forecasts tend to be those with the highest rating (100); the least reliable, the lowest (5). The earnings stability is derived from the standard deviation of percentage changes in quarterly earnings over an eight-year period. Special adjustments are made for comparisons around zero and from plus to minus.

Earnings Surprise—company earnings reports that are significantly better or worse than were forecast.

Equally Weighted Average—a stock price index that gives equal weight to each stock regardless of its price or market capitalization. The Value Line indexes are equally weighted averages.

Equity—ownership interest held by shareholders in a corporation (essentially the same as stock).

Equity Offering—the selling of stock by a corporation.

Ex-Dividend Date—the date by which an investor must have purchased a stock in order to receive announced dividends or stock distributions.

Expense Ratio (Insurance Property/Casualty/Industry)—see Percent Expense to Premiums Written.

Expense Ratio (REIT Industry)—expenses other than interest, expressed as a percentage of the average assets.

Expenses/Assets (Investment Companies)—operating expenses expressed as a percentage of the investment company's total assets at year end.

Exports—the sale of goods and services from one country to another. U.S. exports of goods and services are reported by the Commerce Department in its Gross Domestic Product (GDP) reports.