Information Coefficient (IC)

Definition:

The correlation between predicted and actual stock returns, sometimes used to measure the contribution of a financial analyst. An IC of 1.0 indicates a perfect linear relationship between predicted and actual returns, while an IC of 0.0 indicates no linear relationship.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Return on sales

A measurement of operational efficiency equalingnet pre-tax profits divided by net sales expressed as a percentage.

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