Yield on invested assets is a financial metric that measures the total income generated from investments over a year, after accounting for all expenses. This figure is then divided by the average of cash and net invested assets. Essentially, it provides insight into the average return a company earns on its invested assets, excluding any capital gains or losses and income taxes.
This term is often used in financial and investment contexts, particularly in corporate finance and accounting. Legal professionals may encounter this metric when assessing a company's financial health, especially in mergers and acquisitions, investment analysis, or when drafting financial disclosures. Users can manage related forms and documents through tools like US Legal Forms to ensure compliance and accuracy in financial reporting.
Here are a couple of examples of abatement:
For instance, if a company generates $1 million in investment income and incurs $200,000 in expenses, the yield on invested assets would be calculated based on the net income of $800,000 divided by the average of its cash and invested assets.
(hypothetical example) A company with $5 million in cash and $15 million in net invested assets would have an average of $10 million. Therefore, the yield would be 8 percent.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| State | Notes |
|---|---|
| California | May have specific regulations regarding investment income disclosures. |
| New York | Requires detailed reporting on financial metrics for public companies. |
| Term | Definition | Key Differences |
|---|---|---|
| Return on Investment (ROI) | A measure of the profitability of an investment. | ROI considers capital gains/losses, while yield on invested assets does not. |
| Net Asset Value (NAV) | The value of an entity's assets minus its liabilities. | NAV focuses on total asset valuation, not income generation. |
If you are assessing your company's financial performance or preparing for investment analysis, consider calculating the yield on invested assets. You can find templates and forms on US Legal Forms to assist you in documenting your financial metrics accurately. If your situation is complex, consulting with a financial advisor or legal professional may be beneficial.
Browse our library of 85,000+ state-specific legal templates.
| Attribute | Details |
|---|---|
| Typical Calculation | Total investment income after expenses / Average of cash and net invested assets |
| Common Use | Corporate financial analysis and investment assessments |
| Exclusions | Capital gains/losses, income taxes |