Calculators

Calculate the Treynor Ratio to Measure Risk-Adjusted Portfolio Performance

The Treynor Ratio or “Treynor Index” is used to measure investment returns against the available risk-free rate of return. Developed by Jack Treynor, the ratio provides an analysis similar to the Jensen and Sharpe ratios to enable investors to more clearly evaluate the trade-off between investment risk and return.
The formula for the Treynor Ratio [...]

Calculate Your Back-End Ratio for Mortgage Approval

A back-end ratio is a measure used by mortgage lenders to determine the portion of the borrower’s monthly income that goes toward paying off debts. Also known as the “debt to income ratio”, the measure includes such things as credit card and other loan payments, child support, and mortgage payments.
The calculation for the back-end [...]

Calculate Your Front-End Ratio for Mortgage Approval

A front-end ratio is a measure used by mortgage lenders to determine how much a borrower can afford for a monthly mortgage. Specifically, the ratio calculates how much of the borrower’s income is used to make those monthly mortgage payments. The front-end ratio is calculated by dividing monthly household expenses by gross income [...]

A Fixed-Rate Loan Calculator

Fixed-rate loans are loans in the borrower pays equal amounts to the lender for a set number of periods until the loan (plus interest) are paid back in full. Under a fixed-rate loan, these payments remain consistent regardless of changes in interest rates. While there are a number of loan options available, a [...]

Calculate Terminal Value for Discounted Cash Flow Analysis

Terminal Value refers to the present value of a security at some future point in time. To calculate terminal value, the investor takes the principal amount and applies an interest rate and length of time for the investment. The terminal value is a useful component in other financial valuations, including discounted cash flow [...]

Calculate the Kelly Criterion to Determine Investment Allocation

The Kelly Criterion is a mathematical formula that was devised to help gamblers determine the most favorable sizes for a series of wagers. Originally developed by John Larry Kelley Jr., the calculation also offers a method for maximizing long-term investment returns through a formula that accounts for both win/loss ratio and a winning probability [...]

Calculate Jensen’s Measure to Evaluate Portfolio Performance

Jensen’s Measure or “Jensen’s Alpha” is a measure of the risk-adjusted performance of a portfolio beyond the return forecasted by the capital asset pricing model (CAPM). Introduced in the 1970s by Michael Jensen, the measure can be used for a number of assets, including stocks, bonds, or derivatives. The theory behind Jensen’s measure [...]

A Present Value Interest Factor Calculator

A Present Value Interest Factor (PVIF) is a factor that is used to calculate the present value of a future value or payment. Often presented in the form of a table, PVIFs help to simplify the calculation through the application of period and interest rate combinations.
Present value calculations are commonly used in business and [...]

Calculate and Interpret the Return on Sales Ratio

The Return on Sales (ROS) ratio, also known as the “operating profit margin”, is used to evaluate the operational efficiency of a company by measuring the management’s competence in its effective use of each sales dollar the company generates. The Return on sales provides an indication as to how well costs are managed and [...]

Calculate and Interpret the Berry Ratio

The Berry ratio is a measure of a company’s gross profits to its operating expenses to provide an indication of company profits over a specific period of time. A measure of 1.0 or greater would show that the company is earning a profit over and above its variable expenses. A score of less [...]