Franchise Factor

The measurement of the impact on a company's price-earnings (P/E) ratio per unit growth in new investment. For example, a franchise factor of 3 would indicate that the P/E ratio of a company would increase by three units for every unit of growth in the company's book value.

The franchise factor can be calculated as the product of annual investment returns in excess of market returns and the duration of the returns. A P/E ratio will not be elevated with a high franchise factor alone.

A company with a high franchise factor will have exceptionally high P/E ratios in comparison to its book value. This comes from the ability to continually capitalize on basic strengths, rather than the financial strength of the business. Because this is the case in many franchises, the term "franchise factor" was developed.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Franchise P/E — The expected value of new business opportunities available to a business. The franchise approach to evaluating a company breaks down the company s observed P/E into two primary components: the P/E coming from the company s business activities… …   Investment dictionary

  • National Football League franchise moves and mergers — Throughout the years, a number of teams in the National Football League (NFL) have either moved or merged. In the early years, the NFL was not stable and teams moved frequently to survive, or were folded only to be resurrected in a different city …   Wikipedia

  • X-Factor (comics) — X Factor is an American comic book series published by Marvel Comics. Since its February 1986 inception, the comic has been revamped a few times, each relaunch featuring a different superhero team semi related to the team featured in the book s… …   Wikipedia

  • The X Factor (TV series) — For the original UK version, see The X Factor (UK) The X Factor is a television music talent show franchise originating in the United Kingdom, where it was devised as a replacement for the massively successful Pop Idol . The competitions, now… …   Wikipedia

  • The X Factor (UK) — Infobox Television show name = The X Factor size = caption = The X Factor current logo (2006 – present) format = Talent show creator = Simon Cowell presenter = Main show: Dermot O Leary The Xtra Factor: Holly Willoughby judges = Simon Cowell… …   Wikipedia

  • The X Factor — Genre Télé crochet Présenté par Dermot O Leary Pays  Royaume Uni Langue(s) Anglais …   Wikipédia en Français

  • The X Factor (Royaume-Uni) — Pour les articles homonymes, voir X Factor. The X Factor Genre Télé crochet Présentation Dermot O Leary Pays …   Wikipédia en Français

  • The X Factor (États-Unis) — The X Factor (U.S.) Titre original The X Factor Genre Réalité Création Simon Cowell Présentation Steve Jones Pays États Unis Langue …   Wikipédia en Français

  • Pinoy Fear Factor — infobox television bgcolor=#c00 fgcolor=#fffc show name = Pinoy Fear Factor caption = format = Reality Show runtime = 30 45 minutes creator = ABS CBN starring = Ryan Agoncillo, host theme music composer = country = flagicon|Philippines… …   Wikipedia

  • Alien (creature in Alien franchise) — This article is about the creature from the Alien film series. For other fictional aliens, see Extraterrestrial life in popular culture. For other uses, see Alien (disambiguation). Alien An Alien in Alien vs. Predator Classification …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.