Return: Difference between revisions
imported>Doug Williamson (Update first definition.) |
imported>Doug Williamson (Expand first definition.) |
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Return is the surplus of the amount received back from an investment, compared with the initial amount invested. | Return is the surplus of the amount received back from an investment, compared with the initial amount invested. | ||
Or the surplus of the current value, over and above the initial amount invested. | |||
To facilitate comparisons, rates of return are usually expressed as a percentage of the initial amount invested, often as an effective annual rate of return. | To facilitate comparisons, rates of return are usually expressed as a percentage of the initial amount invested, often as an effective annual rate of return. | ||
Revision as of 19:55, 22 November 2019
1. Investment appraisal.
Return is the surplus of the amount received back from an investment, compared with the initial amount invested.
Or the surplus of the current value, over and above the initial amount invested.
To facilitate comparisons, rates of return are usually expressed as a percentage of the initial amount invested, often as an effective annual rate of return.
When expressed on this basis, the rate of return is also known as 'yield'.
Returns can be negative.
Negative returns mean that the amounts received back from an investment are less than the amounts initially invested.
2. Investment appraisal.
Return can also sometimes mean the total amount received back at the end of investment period, including the initial amount invested.
Here as elsewhere, transparency and consistency of definitions are essential.
3. Reporting.
A return is also a regular and standard-formatted report.
For example, a tax return made to a tax authority.
