Annual Basis


Annual Basis
The return earned by an investment over the course of a year. Projections containing the phrase "on an annual basis" have usually used less than a year's worth of data to project a full year's worth of returns. For example, an investment might have returned 1.5% in one month. By multiplying this return by 12, an 18% annual basis is the result. The shorter the period of data used to determine an annual return, the less accurate that projection is likely to be. Statements about what an investment will return on an annual basis are always estimates.

Annual basis can also refer to the cost of something over the course of a year. For example, if Angela wanted to establish a household budget for the year and it was April 1, she could look at how much money her family had spent on groceries in January, February and March to estimate what her family’s grocery costs would be on an annual basis. She sees that she spent $300 in January, $250 in February and $350 in March, for a total of $900. Since 25% of the year has passed, she multiplies $900 x 4 to determine that groceries should cost her family around $3,600 on an annual basis.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • annual information update — As required by the Prospectus Rules, a document prepared by a listed company on at least an annual basis that contains or refers to all regulated information that the company has published or made available to the public within and outside the EU …   Law dictionary

  • annual — / ænjuəl/ adjective for one year ● an annual statement of income ● They have six weeks’ annual leave. ● The company has an annual growth of 5%. ● We get an annual bonus. ♦ on an annual basis each year ● The figures are revised on an annual basis …   Dictionary of banking and finance

  • Annual Reports Section A — Infobox Journal discipline = Chemistry abbreviation = Ann. Rep. Prog. Chem. Sect. A website = http://www.rsc.org/Publishing/Journals/ic/index.asp publisher = Royal Society of Chemistry country = United Kingdom history = 1904 to present.… …   Wikipedia

  • Annual Reports Section C — Infobox Journal discipline = Chemistry abbreviation = Ann. Rep. Prog. Chem. Sect. C website = http://www.rsc.org/Publishing/Journals/pc/index.asp publisher = Royal Society of Chemistry country = United Kingdom history = 1904 to present.… …   Wikipedia

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  • annual percentage rate — noun : a measure of the annual percentage cost of consumer credit (as in installment buying or a charge account) that is required by law to appear on statements of credit accounts and is variously computed but always takes into consideration the… …   Useful english dictionary


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