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What is CAPE Ratio?CAPE Ratio, abbreviated form for Cyclically-Adjusted Price to Earnings Ratio, is used as a valuation tool to measure the relationship between the company’s earnings per share over a period of 10 years and company’s stock price flushing out all the fluctuations which may occur in the company’s profits during various business cycles and different periods and seasons.
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Formula
The formula for CAPE ratio is:
CAPE Ratio = Stock Price / 10-Years Average Earnings Per Share Adjusted for Inflation
ExplanationCAPE ratio is considered to be a valuation measure which takes into consideration the effect of a company’s earning over a period of a decade post considering the effect of inflation and its simultaneous relation with that company’s stock price in the market. The utmost important point here is that the CAPE ratio can be also applied to any type of indices to get an idea about whether the market is over-valued or under-valued.
This is also referred to as the Shiller P/E ratio, as it was largely popularized by a professor of Yale University, namely, Robert Shiller.
Example of CAPE Ratio (With Excel Template)Let’s take an example to understand the calculation in a better manner.
You can download this CAPE Ratio Excel Template here – CAPE Ratio Excel Template
Example #1Carivacous Ltd is listed in a stock exchange currently trading at $1500 per share. The current year EPS of the company is $125. Below given table provides details of earnings per share (EPS) of the past 10 years pertaining to the stock of Carivacous Ltd. Along with EPS, inflation rates are provided pertaining to the specified years respectively. Calculate the CAPE ratio for Carivacous Ltd.
Solution:
PE Ratio is calculated using the formula given below
PE Ratio = 1500 / 125
PE Ratio = 12
10-Years Average Earnings Per Share Adjusted for Inflation is calculated as
CAPE Ratio is calculated using the formula given below
CAPE Ratio = Stock Price / 10-Years Average Earnings Per Share Adjusted for Inflation
CAPE Ratio = 1500 / 49.73
CAPE Ratio = 30.16
Thus, it can be seen that although the PE for the stock for the current year is 12, its CAPE ratio is at 30. Alternatively, you can also say that the stock is overvalued.
Example #2Let us take a different example to understand the valuation aspect of a stock or index. Now, consider that an Index has a PE ratio of, say 20 with a historical PE ratio of 24. Now, post computing the CAPE ratio (as explained in the earlier example), the CAPE ratio for the index stands at 34. Please give an explanation of the valuation of the index.
In the case at hand, it is pertinent to note that the current PE of the Index, 20, is very similar or nearby to its historical PE, which is at 24.
Now, you may note that the historical PE is a formula to calculate average PE of the stock or index over the period of 10 years as a simple average. On the other hand, the CAPE ratio stands at 34, which takes into consideration the inflation and cyclical impact of the EPS over a period of 10 years. Even after such adjusted, the CAPE ratio is fairly higher than the current PE and historical PE, which makes the index quite overvalued and risky to be invested in.
Uses of CAPE Ratio
It is mainly used as a financial tool to analyze the PE ratio of a company or index post considers the impact of cyclical changes in the economy over a period of 10 years.
Apart from being used as a financial tool, the CAPE ratio is used to determine whether the stock of a listed company is over-valued or under-valued, as it is quite similar to the PE ratio.
A consistent analysis of the CAPE ratio will be useful as a tool for analyzing the future trends and patterns of the stock or index, as the case may be.
Below we will learn about the limitation and benefits of CAPE ratio:
AdvantagesGiven below are the main benefits of CAPE ratio:
It is a very simple mathematical formula and thus easy to calculate by anyone having a basic knowledge of finance;
Due to the fact that this ratio considers the average value of EPS over a period of time, it balances out the effect of any cyclical returns the company may generate and thus gives a better picture of the earnings by the company;
It takes into consideration the impact of inflation on the economy.
The main concern is that the ratio considers an average of earnings for a period of 10 years. In a practical scenario, there are various changes that a business may undergo in such a long timeframe and thus affecting the way business is being carried on for over the years. In such a situation, it may not be right to compare a business today with what it was a decade ago;
In addition to the above point, it needs to be noted that the law governing the business changes massively over such long timeframe and making an impact of the way business is being carried on;
It may be noted that there are various companies that declare and pay dividends to their shareholders. Ratio is completely independent of this and does not take into account any dividend numbers;
Another point that is important and yet not considered while computing the ratio is that the market keeps fluctuating and so does the demand market of a particular stock.
ConclusionTo conclude the whole discussion, it shall be right to say that the CAPE ratio is a tool or method to measure the valuation aspect of any stock or index. It provides an answer in the form of whether the stock or index is over-valued or under-valued. It takes into consideration the impact from an economics point of view and also of the fact of any cyclical changes which may affect stock or index and thus it a better measure to get an insight about future returns of the stock or index in question.
Recommended ArticlesThis is a guide to the CAPE Ratio. Here we discuss how to calculate the cape ratio along with practical examples. We also provide a downloadable excel template. You may also look at the following articles to learn more –
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Types And Criteria With Example
Definition of Non-Controlling Interest
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ExplanationThe portion of the interest is left out after the holding company’s claim. For example, Zee Ltd wants to acquire 60% of the equity shares of B Ltd, so in this case, out of 100% holding of B Ltd, 60% will be given to Zee. Now Zee will be the holding company, and the rest of the shares % which is 40%, will be considered as Non-controlling interest. They will not allow to manage any company affairs and not require interfering in the company’s decisions. Sometimes a situation arises when there are losses in the company, so in that case, the losses which apply to the It is combined subsidiary may exceed the non-controlling interest of the single subsidiary. The non-controlling interest holders get the share as per the confined % of the controlling interest they share in the company.
ExampleSolution:
Particulars
Total
Holding Company
Controlling Interest (80%)
Non controlling interest ( 20%)
Share Capital 800,000.00 640,000.00 160,000.00
Reserve 60,000.00 48,000.00 12,000.00
860,000.00 688,000.00 172,000.00
Types
There are two types of non-controlling interest: direct non-controlling interest and another is Indirect non-controlling interest.
In direct non-controlling interest, the minority shareholders, i.e., those who are non-controlling interest bearing in the company, will get the profits to share of pre and post-acquisition. In contrast, in the case of indirect non-controlling interest, only post-acquisition profits are shared with the minority interest holders, and the pre-acquisition profits are not shared. The non-controlling Interest holders get a share of this distribution as per their controlling interest percentage in the company.
Criteria for Non-Controlling Interest Recording of Non-Controlling Interest
First of all, we must find that the acquisition is on which date.
Then find out the company which acquires and the company which is acquiring.
Calculation of Pre-acquisition and Post-acquisition profits are done.
Calculation of Pre-acquisition and Post-acquisition of reserves and surpluses are done.
In the next step, the distribution of profits takes place.
The Minority Interest record is under the head of Equity and Liability.
Minority Interest is separately recorded in the Balance sheet with its own name.
Advantages
Non-Controlling Interest holders can anyway get access to the company’s financial books.
Taking a small share as a minority interest holder in a very emerging business can help the growth of individual investors.
The Non-Controlling Interest holders can see the business developments and get an insider’s view to plan their investment in such a way.
In most cases, the minority interest holders gain a huge average return on their funds since they know the company’s norms.
The risk also subsides because a huge investment does not require from the minority interest holders, and thus they can enjoy the benefit of the low risk and more gains on returns.
In the case of a business sale, the minority interest holder can sell part of this stake without many legal complications.
ConclusionIt is a very wide term. Minority shareholders of the company are not allowed to participate in the company’s meetings, but sometimes they can make a decision for the board members. If the board’s performance is not satisfactory, then the minority shareholders can ask the board to take action against them. In the corporate, the minority interest holder meeting and voting can be very influential. Non-controlling Interest holder also makes huge profits and returns on their investment in the company. They make very little investment per the company’s emerging business but can gain huge profits. Non Controlling Interest also gets their share in case of an acquisition. It is given emphasis in the Balance Sheet and is shown as a separate item.
Recommended ArticlesBasic Sql Injection And Mitigation With Example
SQL injection is a type of cyber attack that allows attackers to execute malicious SQL statements on a database. These statements can be used to manipulate data, retrieve sensitive information, or even delete entire databases. It is one of the most common and dangerous types of web vulnerabilities, and it can affect any website or web application that uses a SQL database.
In this article, we will cover the basics of SQL injection, how it works, and how to prevent it. We will also provide an example of a basic SQL injection attack and show how to mitigate it.
What is SQL Injection?SQL, or Structured Query Language, is a programming language used to manage and manipulate data stored in relational databases. It is the standard language for interacting with databases, and it is used by millions of websites and applications around the world.
SQL injection is a type of cyber attack that exploits vulnerabilities in SQL-based applications. It allows attackers to insert malicious code into an application’s SQL statements, which can then be executed by the database. This can allow attackers to gain unauthorized access to sensitive data, modify or delete data, and even gain control of the entire database.
How Does SQL Injection Work?For example, consider a simple login form that asks for a username and password. The application might generate an SQL query like this to verify the user’s credentials &miuns;
SELECT * FROM users WHERE username='$username' AND password='$password';In this case, the $username and $password variables are replaced with the user’s input. If a user enters their own username and password, the query will work as intended. However, if an attacker enters malicious input, they can manipulate the query to do things like retrieve sensitive data or even delete entire tables.
For example, an attacker might enter the following as their password −
' OR 1=1; - SELECT * FROM users WHERE username='$username' AND password='' OR 1=1; --'; How to Prevent SQL Injection?Preventing SQL injection attacks requires a combination of good design practices and proper input validation. Here are a few steps you can take to protect your application −
Use parameterized queries − One of the easiest and most effective ways to prevent SQL injection is to use parameterized queries. This involves separating the SQL code from the user input and passing the input as a separate parameter. This ensures that the input is treated as a value, rather than part of the SQL code, and makes it much harder for attackers to inject malicious code.
Validate and sanitize user input − Another important step is to validate and sanitize all user input. This involves checking the input for any characters or patterns that might indicate an attempt to inject malicious code. You should also limit the type and length of input that users can enter.
Use prepared statements − Prepared statements are a type of parameterized query that can be used to protect against SQL injection. They allow you to create a template for an SQL statement, and then pass in the parameters at a later time. This can help to prevent SQL injection because the parameters are not parsed until they are passed to the prepared statement, which means that any malicious code will be treated as a value, rather than part of the SQL code.
Enforce strong passwords − One of the most common ways for attackers to gain access to a database is by guessing or cracking weak passwords. To prevent this, you should enforce strong password policies, including using long passwords that are difficult to guess or crack. You should also consider using two-factor authentication or other security measures to protect sensitive accounts.
Example: Basic SQL Injection Attack and MitigationTo illustrate the basics of SQL injection, let’s walk through an example of a simple login form that is vulnerable to injection attacks. We will then show how to mitigate the vulnerability using parameterized queries.
First, let’s create a simple table in a MySQL database to hold our users −
CREATE TABLE
users
(
id INT AUTO_INCREMENT PRIMARY KEY,
usernameVARCHAR
(
50
)
NOTNULL
,
passwordVARCHAR
(
50
)
NOTNULL
)
;
Next, let’s create a login form with a simple HTML form −
ExampleThe form sends a POST request to chúng tôi with the username and password fields. We can then use PHP to handle the request and check the user’s credentials against the database −
<?php
$db
=
new
mysqli
(
"localhost"
,
"username"
,
"password"
,
"database"
)
;
if
(
isset
(
$_POST
[
"username"
]
)
&&
isset
(
$_POST
[
"password"
]
)
)
{
$username
=
$_POST
[
"username"
]
;
$password
=
$_POST
[
"password"
]
;
$query
=
"SELECT * FROM users WHERE username='
$username
' AND password='$password
'";
echo
"Logged in successfully!"
;
}
else
{
echo
"Invalid username or password"
;
}
}
This code creates an SQL query using the `username` and `password` fields from the form, and then executes the query using the `query()` method of the ‘mysqli’ object. If the query returns any rows, it means that the username and password are correct, and the user is logged in.
However, this code is vulnerable to SQL injection attacks. An attacker can enter malicious input into the form, which will be incorporated directly into the SQL query. For example, if an attacker enters the following as their username −
admin' --The resulting SQL query will look like this −
SELECT * FROM users WHERE username='admin' --' AND password='$password';<?php
$db
=
new
mysqli
(
"localhost"
,
"username"
,
"password"
,
"database"
)
;
if
(
isset
(
$_POST
[
"username"
]
)
&&
isset
(
$_POST
[
"password"
]
)
)
{
$username
=
$_POST
[
"username"
]
;
$password
=
$_POST
[
"password"
]
;
echo
"Logged in successfully!"
;
}
else
{
echo
"Invalid username or password"
;
}
}
In this version of the code, we use a prepared statement to create a template for the SQL query. We then bind the username and password variables to the prepared statement as parameters, using the bind_param() method. This ensures that the input is treated as a value, rather than part of the SQL code, which makes it much harder for attackers to inject malicious code.
ConclusionSQL injection is a serious and widespread security vulnerability that can compromise the integrity and confidentiality of your database. To protect your applications and your data, it is important to follow best practices for designing and implementing your SQL code, and to use proper input validation and sanitization techniques. By using parameterized queries and other prevention measures, you can help to prevent SQL injection attacks and keep your applications and data safe.
Checklist Template In Google Sheets With Download
In this tutorial, we’ll create a checklist template in Google Sheets.
We’ll use checkboxes, conditional formatting and a sparkline to build a checklist template like this:
Checklist Template Use CaseThere are many situations when a checklist comes in handy.
From simple to-do lists to project planners, from teaching lessons to tracking physical goods.
When I teach live workshops, I often include a front sheet in my Google Sheet that I use as a checklist for the exercise steps.
It ensures I don’t forget anything and gives the audience a visual clue as to where we’re up to in the workshop. And I get almost as many questions about how I built these checklists as for the topic of the actual workshops.
How To Create A Google Sheets Checklist Template Checklist TemplateFeel free to download the checklist template and make your own copy:
I’ve set my file sharings to allow anyone with the link to view this file. You may not be able to open this file because it’s from an outside organization, and my Google Workspace domain is not whitelisted at your organization. You may be able to ask your Google Workspace administrator about this.
In the meantime, feel free to open it in an incognito window and you should be able to view it.
1. Sheet Set upWe start with the checklist title on row 1, center aligned.
Then leave a blank row.
On row 3, we put the word “Progress” in column 1. Leave the other column blank for now.
Row 4 is blank.
On row 5, put the headers for the checklist table: Status and Step
On rows 6 onwards, we put a checkbox in column 1 and the corresponding step in column 2 of that row.
2. Add Conditional FormattingNext, we’ll apply conditional formatting across an entire row to turn the row red when it’s marked as done.
Highlight all the rows with your checkboxes and steps, e.g. A6 to C15 in this example.
Select Conditional Formatting and add this Custom Formula Is rule:
=$A6
Set the formatting rules to light red background, dark red text, and strikethrough.
Now, whenever you check the checkboxes, the entire row will be formatted red to show it’s complete (see the GIF image at the start of this post).
3. Use A Sparkline To Create A Status BarHere’s the sparkline function in cell B3 that creates that dynamic status bar:
=SPARKLINE(COUNTIF(
A6:A
,
TRUE
),{
"charttype"
,
"bar"
;
"max"
,COUNTA(
B6:B
) ;
"color1"
,
"red"
})
Let’s break it down to see what’s going on.
Checkbox CountFirstly, the COUNTIF function:
COUNTIF(A6:A, TRUE)
counts how many of the checkboxes in column A have been checked (i.e. have a TRUE value).
The output of this is a single number, between 0 and 10 in this example.
We pass that value into the SPARKLINE function.
Sparkline Bar ChartThen we set the sparkline to be a bar chat, with the first option:
"charttype","bar"
Max ValueNext, we need to specify a maximum value for the bar chart, so that it can compare the count of checked checkboxes (e.g. 4) against the maximum possible number (10 in this example) to get the percentage completion.
We could simply type in the max value of 10 as an option, but it’s better practice to set it with a formula so that it will update automatically if your data changes.
To do this we count the number of “steps” in the column next to the checkboxes:
"max",COUNTA(B6:B)
Custom ColorFinally, we set a custom color for the sparkline with the final custom option:
"color1","red"
NotesIn some European countries, sparkline formulas have a slightly different syntax and use “” instead of “;” (read more here about syntax differences based on Google Sheets location).
Pro tip: to select or un-select multiple checkboxes at once, highlight them all and press the space bar!
4. Add A Progress PercentageThe final formula goes in cell C3 next to the sparkline to show the actual percentage complete value:
=COUNTIF(
A6:A
,
TRUE
)/COUNTA(
B6:B
)
This counts the checkboxes in column 1 and divides them by the total count of steps in column 2. Format it as a “%”.
Architecture Of Db2 With Brief Explanation
Introduction to DB2 Architecture
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Architecture of DB2The architecture of DB2 are given below:
1. DB2 ClientThe DB2 clients can be either remote application or local applications each of which is linked internally with the client library of DB2. The communication between client and server is made by using different techniques. If the client is local then semaphores and shared memory are used for communication. In the case of remote clients, the communication is carried out by using different protocols like TCP/ IP or named pipes which are also denoted as NPIPE.
2. DB2 ServerThe DB2 server consists of different components in which all the activities are controlled by the units called Engine Dispatchable Units that is EDUs. We can observe different components of the DB2 server and the DB2 client-server communications by having a look at the below diagram –
3. Engine Dispatchable Units (EDUs) 4. SubagentsA different set of subagents is used for serving the requests from client application processes. There is a facility and possibility that we can assign multiple subagents provided if the machine which we are using for the DB2 server has multiple processors or the DB2 server internally uses a partitioned database environment. One of the examples, where we can use multiple subagents is symmetric multiprocessing(SMP) which is an environment and the multiple SMP are capable of exploiting multiple processors at the same time.
5. Pooling AlgorithmThe pooling algorithm is responsible for managing the agents and subagents that are present inside the DB2 server. This algorithm helps us to minimize the destruction and construction of the EDUs inside DB2 server.
6. Buffer PoolBuffer pools is the place where the actual data resides. These pools are the part of the memory of our database server which stores the data related to pages of a user, catalog data, and the index data temporarily. There after this data is moved to Hard disks. But initially and while manipulating the data is brought to these pools and modified and manipulated. The buffer pools are regarded as one of the key parameters for measuring the performance of the DB2 server. This is because of the fact that accessing the data from the memory of the buffer pools is much faster and simpler than accessing it from the hard disk.
How quickly can the data inside the DB2 servers can be accessed by the DB2 client side applications depends upon the configurations of the buffer pools as well as other components like page cleaners and the prefetchers.
7. Prefetchers 8. Working of PrefetchersThe client side requests are implemented by prefetchers by using the scatter-read and big-block input operations when the prefetchers become available they bring all the pages which are requested into the buffer pool from the disk. We can also strip the data across the disks provided if we have multiple disks for storing the data. The use of stripping the data helps us and enables the use of prefetchers to retrieve the data simultaneously from multiple disks.
9. Page CleanersThe working of page cleaners is just the opposite of prefetchers. The responsibility of prefetchers is to move the data to the hard disk from the buffer pool. They work in the background of the EDUs because they are independent of the other agents of the application. The page cleaners are responsible for having the look at which pages are changed and the updated modified pages are written back to the disk. It is the responsibility of the page cleaners to make sure that the required space is available in the buffer pools for the working of the prefetchers. If there were no independent page cleaners and the prefetchers in the DB2 server then the other agents of the application would have to all the operations related to read and write between disk storage and the buffer pool.
ConclusionThe architecture of the DB2 consists of different components. The architecture of the DB2 is mainly divided into the DB2 client and DB2 server. The DB2 server consists of different agents and subagents. The two important components are the prefetchers and the page cleaners which maintain the data in buffer pools for fast and effective retrieval of data.
Recommended ArticlesThis is a guide to DB2 Architecture. Here we also discuss the introduction and architecture of DB2 along with a detailed explanation. You may also have a look at the following articles to learn more –
Types And Benefits Of Recourse Loan With Example
What is a Recourse Loan?
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Key TakeawaysSome of the key takeaways of the article are:
A recourse loan is a financing instrument in which the lender can seize the collateral and any other assets in the defaulter’s name to recover the debt money.
Examples of other assets include other bank deposits, income sources, etc.
A recourse loan is backed by collateral and the borrower’s liability. Hence, the lender has to assume significantly lower risk in this type of loan.
Although there are many different recourse loans, the two most common types are hard money loans and auto loans. Not all mortgages are recourse loans, but the hard money loans in real estate purchases are recourse loans.
Examples of Recourse LoanLet us now look at the following example to understand the concept of recourse loans.
Four years back, John got a stable job in a multinational company with an annual package of $75,000. Three months after joining the job, he purchased a house worth $300,000 in the countryside. However, when he checked his savings account, he realized that he had a savings of $60,000, which he decided to use as equity in this real estate purchase. So, he approached a bank for a housing loan of $240,000.
Unfortunately, today John defaulted on the bullet payment, and the lender immediately seized his house for foreclosure and subsequent recovery of the debt from the sale, resulting in proceeds of $75,000. So, the remaining $75,000 (= $150,000 – $75,000) plus the interest cost will be recovered through garnishment, wherein the outstanding loan balance will be directly deducted from his monthly paycheck until the entire loss amount is settled.
In this way, the recovery of losses occurs in a recourse loan when the borrower defaults.
Types of Recourse Loan
Hard money loans: In the case of a real estate acquisition, a hard money loan is considered a recourse loan because its terms give the lender the right to take possession of the borrower’s property after default and then resell it for a more significant gain.
Auto loans: Since the value of automobile cars depreciates over a period, which exposes the lenders to the risk of adequate recovery in the event of a default. Hence, most auto loans are recourse loans in nature.
Benefits of Recourse LoanSome of the significant benefits of a recourse loan are as follows:
Some assets adequately back it in the form of collateral. Besides, there is the total liability of the borrower, which means that the lender doesn’t need to bear too much risk.
Borrowers get recourse loans as per their credit profile and financial position. People with good credit histories are offered favorable interest rates, while those with poor credit histories can get the loan on the back of their unlimited liability.
With such flexibility in lending terms, these loans result in the maximum flow of money in an economy through more frequent and easy lending.
First, the borrowers who default on a recourse loan may lose much more than the collateral provided because the lender invariably goes after the borrower’s other assets and income stream to recover the outstanding loan balance.
Further, the borrower who fails to repay a recourse loan loses not just the money, but such an event can be a very traumatic experience for them. It can get tricky for them to cope psychologically.
ConclusionSo, it can be seen that a recourse loan is a binding debt financing instrument that secures the lenders and makes their life much easier. But, on the other hand, it is not so favorable for the borrowers as they may be exposed to severe consequences in the event of a default. Hence, borrowers should consider all the aspects of the loans before signing up for any recourse loan.
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