General Terminology
What is EBITDA?
A proxy for cash flow from operations, this acronym stands for Earnings before interest, taxes, depreciation and amortization.
What is Stabilized Real Estate (SRE)?
An Island Holdings real estate category that describes real estate in a steady, recurring cash flows state, after the developmental phase.
What is the Annual Budget?
This annual process used by businesses, corporations or governments, estimates a company’s income and expenses and assists in planning for the upcoming year.
What is Book Value?
The value of an asset according to its balance sheet account balance. e.g. original cost of the asset less any depreciation, amortization, or impairment against the asset.
What is Liquidity?
The company's ability to raise cash when it needs it (i.e. its ability to easily turn assets or investments into cash).
What is Return on Equity?
The measure of a company's profitability and how efficiently it generates those profits. It's calculated as net income, divided by the average shareholder's equity for that period/year.
What is Real Estate Development or Value-Add?
An Island Holdings real estate category that describes real estate that is NOT in a steady, recurring cash flow state and typically carries a higher risk, but higher return profile.
What is Forecasting?
This technique uses historical and current data as to make informed estimates to predict future developments of a business or industry.
What is Net Income?
The ending profit and loss number after factoring in all revenues, expenses, interest expense, taxes, depreciation and amortization.
What is Capital Allocation?
The process of determining the most efficient investment strategy for an organization's financial resources, with the goal of maximizing shareholder equity.
What is Debt Service Coverage Ratio (DSCR)?
A key measure of a company's ability to repay its loans. Measured as the ratio of the annual net operating income divided by the annual debt service (principal and interest).
What is Core Earnings?
This key Island Holdings created financial measure is calculated as EBITDA, less the impacts of unrealized and realized gains and losses.
What is a Strategic Plan?
This plan incorporates a company’s mission, vision, values and long-term goals and defines the actions it takes to achieve those goals.
What are Generally Accepted Accounting Principles (GAAP)?
U.S. publicly traded companies are required to, and some private companies choose to, adopt this common set of accounting rules, standards, and procedures for clarity, consistency, and comparability in financial reporting.
What are Subsidiary Dividends?
The flow of capital/cash from a Tier-1 Subsidiary ultimately to Island Holdings which requires Subsidiary Board Approval.
What is Loan to Value (LTV)?
A key ratio that is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage. It is calculated as the total loan amount divided by the fair market value of the property.
What is Total Shareholder Return?
A measure of financial performance indicating the total amount an investor reaps from an investment. It is calculated as the change in share price plus dividends, divided by the share price at the beginning of the period.
What are Key Performance Indicators?
Short for KPI, these measure a company's success versus a set of targets, objectives, or industry peers.
What are Audited Financial Statements?
The financial statement reports that contain an opinion by a certified public accounting firm. Often required as part of loan covenants with the bank.
What is a Sources and Uses Schedule?
A forward-looking liquidity management tool that takes into account current cash balances and projects out future cash flows based on known or projected cash events (12-24 months into the future).
What is Internal Rate of Return (IRR)?
The metric used in financial analysis to estimate the profitability of potential investments; the rate of growth that an investment is expected to generate annually.
What is Core Earnings before Shared Services?
This key Island Holdings created financial measure is calculated as Core Earnings, before the impacts of the allocated costs from Island Holdings to the various Subsidiaries.
What are Specific, Measurable, Achievable, Realistic and Timely Goals?
During the goal setting process, if your goals are “SMART”, they provide a sense of direction, motivation, clear focus and clarify importance.
What is Consolidation?
The accounting process by which various companies/subsidiaries under common control are combined into one set of financial statements.
What are Target Asset Allocations?
A strategic portfolio strategy whereby the company sets target %s for various asset classes and rebalances the portfolio periodically to obtain those set target %s by asset class.