Total Shareholder Return

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Comparing the change in capital value of companies. Explanation of Total Shareholder Return.

What is Total Shareholder Return? Description

Total Shareholder Return (TSR) represents the change in capital value of a listed/quoted company over a period (typically 1 year or longer), plus dividends, expressed as a plus or minus percentage of the opening value.

Calculation of Total Shareholder Return. Formula

(Share Price at the end of the period - Share Price at the beginning of the period + Dividends) / Share Price at the beginning of the period = Total Shareholder Return.

Note: dividends include not only regular dividend payments, but also include any cash payments to shareholders, and also include special or one-time dividends, and also include share buybacks.

TSR can be easily compared from company to company, and benchmarked against industry or market returns, without having to worry about a bias regarding size. Because Total Shareholder Return is a percentage.

Limitations of Total Shareholder Return

As a result of its nature, TSR can not be calculated at divisional level (Strategic Business Unit) and below. And also as a result of its nature, TSR can not be observed for privately held companies.

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Compare also: Market Value Added  |  Economic Value Added  |  CFROI  |  EBIT  |  EBITDA  |  Cash Ratio  |  Current Ratio  |  Return on Equity  |  Fair Value  |  P/E Ratio  |  PEG Ratio  |  Economic Margin

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