分类
外汇期权交易

Gross Loss( 毛亏损 )

Gross Exposure

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. He received his masters in journalism from the London College of Communication. Daniel is an expert in corporate finance and equity investing as well as podcast and video production.

Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician (CMT). He is also a member of CMT Association.

What is Gross Exposure?

Gross exposure refers to the absolute level of a fund's investments. It takes into account the value of both a fund’s long positions and short Gross Loss( 毛亏损 ) positions and can be expressed either in dollar or percentage terms. Gross exposure is a measure that Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) indicates total exposure to financial markets, thus providing an insight into the amount at risk that investors Gross Loss( 毛亏损 ) are taking on. The higher the gross exposure, the bigger the potential loss (or gain).

Understanding Gross Exposure

Gross exposure is an especially relevant metric in the context of hedge funds, institutional investors, and other traders, who can short and long assets and use leverage to amplify returns. These types of investors Gross Loss( 毛亏损 ) are sometimes more sophisticated and have greater resources than regular, long-only investors.

As an example, hedge fund A has $200 million in capital. It deploys $150 million in long positions and $50 million in short positions. The fund's gross exposure is thus: $150 million + $50 million = $200 million.

Since gross exposure equals capital in this case, gross exposure as a percentage of capital is 100%. If gross exposure exceeds 100%, it means the fund is using leverage — in other words, it is Gross Loss( 毛亏损 ) borrowing money to amplify returns. Alternatively, gross exposure below 100% indicates a portion of the portfolio is invested in cash.

Key Takeaways

  • Gross exposure measures an investment fund's total exposure to financial markets, including long and short positions and use of leverage.
  • A higher gross exposure means that the fund Gross Loss( 毛亏损 ) has a greater amount at stake in the markets.
  • Gross exposure is an especially relevant metric in the context of hedge funds, institutional investors, and other traders, who can short and long assets Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) and use leverage to amplify returns.

Gross Exposure Vs. Net Exposure

The exposure of an investment fund can Gross Loss( 毛亏损 ) also be measured in net terms. Net exposure equals the value of long positions, minus the value Gross Loss( 毛亏损 ) of short positions.

For example, the net exposure of hedge fund A is $100 million. This is Gross Loss( 毛亏损 ) calculated by subtracting $50 million, the amount of capital tied up in short positions, from the $150 million Gross Loss( 毛亏损 ) of long holdings.

If net exposure is the same as gross exposure, it means the fund only has long positions. On the other hand, if net exposure is zero, it means the percentage invested in long positions equals investment in short positions, also known as a market neutral strategy.

A fund has a net long exposure if the percentage amount invested in long positions exceeds the percentage amount invested in short position. Likewise, it has a net short position if short positions exceed long positions.Gross Loss( 毛亏损 )

Assume hedge fund B also has $200 million in capital but uses a significant amount of leverage. As a result, it has $350 million in long positions and $150 million in short positions. The gross exposure in this case is thus $500 million (i.e. $350 million + $150 million), while the net exposure is $200 million (i.e. $350 - $150 million).

Gross exposure as a percentage of capital for hedge fund B = $500 million ÷ $200 million = 250%. Fund B's higher gross exposure means that it has a greater amount at stake in the markets than A. Fund B's use of leverage will magnify losses, as well as profits.

Special Considerations

Gross exposure is generally Gross Loss( 毛亏损 ) used as the basis for calculating a fund's management fees, since it takes into account total exposure of investment decisions on both the long and short side. Portfolio managers combined decisions will have direct Gross Loss( 毛亏损 ) consequences on the performance of a fund and thus distributions to its investors.

An additional method of calculating exposure is a beta-adjusted exposure, also used for investment funds or portfolios. This is computed by taking the weighted average exposure of a portfolio of investments, where the weight is defined as the beta of each individual security.

Gross Investment Income

In calculating the tax on net investment income, gross investment income means the total amount of income from interest, dividends, rents, payments with respect to securities loans (as defined in Code section 512(a)(5)), and royalties (including overriding royalties) received by a pri­vate foundation from all sources. It does not include income included in determining the tax on unrelated business income. However, Gross Loss( 毛亏损 ) it does include interest, dividends, rents, and royalties received from assets devoted to charitable activ­ities. Therefore, interest received on a student loan would be includible in the gross investment income of a private foundation making the loan.

The Pension Protection Act of 2006 makes clear that for taxable years beginning after enactment, gross investment income includes income from sources similar to those already specified. It also changes Gross Loss( 毛亏损 ) the treatment of capital gains and losses so that all capital gains and losses are included in gross income, with a specific exception for like-kind exchanges of related-use property. The law now also provides that no carrybacks or carryovers of capital losses are allowed in computing gross investment income. Finally, it redefines capital gain net income to include property used for the product of gross investment income.

Gross Margin Ratio

The Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross margin of a company to its revenue. It shows how much profit a company makes after paying off its Cost of Goods Sold (COGS).

The ratio indicates the percentage of each dollar of revenue that the company retains as gross profit.

For example, if the ratio is calculated to be 20%, that means for every dollar of revenue generated, $0.20 is retained while $0.80 Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) is attributed to the cost of goods sold. The remaining amount can be used to pay off Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) general and administrative expenses, interest expenses, debts, rent, overhead, etc.

Formula

Gross Margin Ratio = (Revenue – COGS) / Revenue

Gross Margin Ratio Formula

Example

Consider the income statement below:

Gross Margin Ratio

Using the formula, the gross margin ratio would be calculated as Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) follows:

= (102,007 – 39,023) / 102,007

= 0.6174 (61.74%)

This means that for every dollar generated, $0.3826 would go into the cost of goods sold, while the remaining $0.6174 could be used to pay back expenses, taxes, etc.

How to Increase the Gross Margin Ratio

The ratio measures how profitably a company can sell its inventory. A higher ratio is more favorable. There are typically two ways to increase the figure:

1. Buy inventory at a cheaper price

If companies can get a large purchase discount when they purchase inventory or find a less expensive supplier, their ratio will become higher because the cost of goods sold will be lower.

2. Mark up goods

Marking up goods (selling goods at a higher price) would result in a higher ratio. However, this must be done competitively – otherwise, the goods would be too expensive and fewer customers would purchase from the Gross Loss( 毛亏损 ) company.

Download the Free Template

Enter your name and email in the form below and download the free template now!

The Gross Margin Ratio in Different Industries

A low gross margin ratio does not necessarily indicate a poorly performing company. It is important to compare ratios between companies in the same industry rather than comparing them across industries.

For example, a legal service company reports a high gross margin ratio because it operates in a service industry with low production costs. In contrast, the ratio will be lower Gross Loss( 毛亏损 ) Gross Loss( 毛亏损 ) for a car manufacturing company because of high production costs.

Consider the gross margin ratio for McDonald’s Gross Loss( 毛亏损 ) at the end of 2016 was 41.4%. The ratio for the Bank of America Corporation at the Gross Loss( 毛亏损 ) end of 2016 was 97.8%. Comparing these two ratios will not provide any meaningful insight into how profitable McDonalds or the Bank of America Corporation is. But if we compare the ratios between McDonald’s and Wendy’s (two companies operating in the fast-food industry), then we can get an idea of which company enjoys the most cost-efficient production.

Gross profit margin is the first of the three major Gross Loss( 毛亏损 ) profitability ratios. The other two are operating profit margin, which indicates how operationally efficient a company’s management is, and net profit margin, which reveals the company’s bottom line profitability after subtracting all of its expenses, including taxes and interest payments.

There is a wide variety of profitability metrics that analysts and investors use to evaluate companies.

Additional Resources

Click on any of the CFI resources listed below to learn more about profit margins, revenues, and financial analysis.

Gross Investment Income

In calculating the tax on net investment income, gross investment income means the total amount of income from interest, dividends, rents, payments with respect to Gross Loss( 毛亏损 ) securities loans (as defined in Code section 512(a)(5)), and royalties (including overriding royalties) received by a pri­vate foundation from all sources. It does not include income included in determining the tax on unrelated business income. However, it does include interest, dividends, rents, and royalties received from assets devoted to Gross Loss( 毛亏损 ) charitable activ­ities. Therefore, interest received on a student loan would be includible in the gross investment income of Gross Loss( 毛亏损 ) a private foundation making the loan.

The Pension Protection Act of 2006 makes clear that for taxable years beginning after enactment, gross investment income includes income from sources similar to those already specified. It also changes the treatment of capital gains and losses so that all capital gains and losses are included in gross income, with a specific exception for like-kind exchanges of related-use property. The law now also provides that no carrybacks or carryovers of capital losses are allowed in computing gross investment income. Finally, it redefines capital gain net income to include property used for the product of gross investment income.