What Is the 52-Week Range?

The 52-week range is a data point traditionally reported by printed financial news media, but more modernly included in data feeds from financial information sources online. The data point includes the lowest and highest price at which a stock has traded during the previous 52 weeks.

Investors use this information as a proxy for how much fluctuation and risk they may have to endure over the course of a year should they choose to invest in a given stock. Investors can find a stock’s 52-week range in a stock’s quote summary provided by a broker or financial information website. The visual representation of this data can be observed on a price chart that displays one year’s worth of price data.

Understanding the 52-Week Range

The 52-week range can be a single data point of two numbers: the highest and lowest price for the previous year. But there is much more to the story than these two numbers alone. Visualizing the data in a chart to show the price action for the entire year can provide a much better context for how these numbers are generated.

Since price movement is not always balanced and rarely symmetrical, it is important for an investor to know which number was more recent, the high or the low. Usually an investor will assume the number closest to the current price is the most recent one, but this is not always the case, and not knowing the correct information can make for costly investment decisions.

Two examples of the 52-week range in the following chart show how useful it might be to compare the high and low prices with the larger picture of the price data over the past year.

These examples show virtually the same high and low data points for a 52-week range (set 1 marked in blue lines) and a trend that seems to indicate a short-term downward move ahead.

The overlapping range on the same stock (set 2 marked in red lines) now seems to imply that an upward move may be following at least in the short term. Both of these trends can be seen to play out as expected (though such outcomes are never certain). Technical analysts compare a stock’s current trading price and its recent trend to its 52-week range to get a broad sense of how the stock is performing relative to the past 12 months. They also look to see how much the stock’s price has fluctuated, and whether such fluctuation is likely to continue or even increase.

The information from the high and low data points may indicate the potential future range of the stock and how volatile its price is, but only the trend and relative strength studies can help a trader or analyst understand the context of those two data points. Most financial websites that quote a stock’s share price also quote its 52-week range. Sites like Yahoo Finance, Finviz.com and StockCharts.com allow investors to scan for stocks trading at their 12-month high or low.

Current Price Relative to 52-Week Range

To calculate where a stock is currently trading at in relations to its 52-week high and low, consider the following example:

Suppose over the last year that a stock has traded as high as $100, as low as $50 and is currently trading at $70. This means the stock is trading 30% below its 52-week high (1-(70/100) = 0.30 or 30%) and 40% above its 52-week low ((70/50) – 1 = 0.40 or 40%). These calculations take the difference between the current price and the high or low price over the past 12 months and then convert them to percentages.

52-Week Range Trading Strategies

Investors can use a breakout strategy and buy a stock when it trades above its 52-week range, or open a short position when it trades below it. Aggressive traders could place a stop-limit order slightly above or below the 52-week trade to catch the initial breakout. Price often retraces back to the breakout level before resuming its trend; therefore, traders who want to take a more conservative approach may want to wait for a retracement before entering the market to avoid chasing the breakout.

Volume should be steadily increasing when a stock’s price nears the high or low of its 12-month range to show the issue has enough participation to break out to a new level. Trades could use indicators like the on-balance volume (OBV) to track rising volume. The breakout should ideally trade above or below a psychological number also, such as $50 or $100, to help gain the attention of institutional investors.

What Is Accrued Revenue?

Accrued revenue is revenue that has been earned by providing a good or service, but for which no cash has been received. Accrued revenues are recorded as receivables on the balance sheet to reflect the amount of money that customers owe the business for the goods or services they purchased.

Accrued revenue may be contrasted with realized or recognized revenue, and compared with accrued expenses.

Understanding Accrued Revenue

Accrued revenue is the product of accrual accounting and the revenue recognition and matching principles. The revenue recognition principle requires that revenue transactions be recorded in the same accounting period in which they are earned, rather than when the cash payment for the product or service is received. The matching principle is an accounting concept that seeks to tie revenue generated in an accounting period to the expenses incurred to generate that revenue. Under generally accepted accounting principles (GAAP), accrued revenue is recognized when the performing party satisfies a performance obligation. For example, revenue is recognized when a sales transaction is made and the customer takes possession of a good, regardless of whether the customer paid cash or credit at that time.

Accrued revenue often appears in the financial statements of businesses in the service industry, because revenue recognition would otherwise be delayed until the work or service was finished, which might last several months—in contrast to manufacturing, where invoices are issued as soon as products are shipped. Without using accrued revenue, revenues and profit would be reported in a lumpy fashion, giving a murky and not useful impression of the business’s true value.

For example, a construction company will work on one project for many months. It needs to recognize a portion of the revenue for the contract in each month as services are rendered, rather than waiting until the end of the contract to recognize the full revenue.

Recording Accrued Revenue

Accrued revenue is recorded in the financial statements by way of an adjusting journal entry. The accountant debits an asset account for accrued revenue which is reversed with the amount of revenue collected, crediting accrued revenue.

Accrued revenue covers items that would not otherwise appear in the general ledger at the end of the period. When one company records accrued revenues, the other company will record the transaction as an accrued expense, which is a liability on the balance sheet.

When accrued revenue is first recorded, the amount is recognized on the income statement through a credit to revenue. An associated accrued revenue account on the company’s balance sheet is debited by the same amount in the form of accounts receivable.

When a customer makes a payment for the goods or services received, the accountant makes a journal entry for the amount of cash received by debiting the cash account on the balance sheet, and then crediting the same amount to the accrued revenue account or accounts receivable account.

Examples of Accrued Revenue

Accrued revenue is often recorded by companies engaged in long-term projects like construction or large engineering projects. Similar to the example of the construction company above, companies in the aerospace and defense sectors might accrue revenue as each piece of military hardware is delivered, even if they only bill the U.S. government once a year.

Landlords may book accrued revenue if they record a tenant’s rent payment at the first of the month but receive the rent at the end of the month.

What Is an Activity Cost Driver?

An activity cost driver is an action that triggers higher or lower variable costs for a business. Sometimes referred to as a causal factor, it is associated with the managerial accounting concept of activity-based costing (ABC). Keeping tabs on activity cost drivers is important as it can help boost efficiency and company profits.

How Activity Cost Drivers Work

A cost driver affects the cost of specific business activities. In ABC, an activity cost driver influences the costs of labor, maintenance, or other variable costs. Cost drivers are essential in ABC, a branch of managerial accounting that allocates the indirect costs, or overheads, of an activity.

There may be multiple cost drivers associated with an activity. For example, direct labor hours are a driver of most activities in product manufacturing. If the expenditure for labor is high, this will increase the cost of producing all company products or services. If the cost of warehousing is high, this will also increase the expenses incurred for product manufacturing or providing services.

More technical cost drivers are machine hours, the number of engineering change orders, the number of customer contacts, the number of product returns, the machine setups required for production, or the number of inspections. If a business owner can identify the cost drivers, the business owner can more accurately estimate the true cost of production for the business.

Cost Allocation

When a factory machine requires periodic maintenance, the cost of the maintenance is allocated to the products produced by the machine. For example, the cost driver selected is machinery hours. After every 1,000 machine hours, there is a maintenance expense of $500. Therefore, every machine hour results in a 50-cent (500 / 1,000) maintenance cost allocated to the product being manufactured based on the cost driver of machine hours.

Distribution of Overhead Costs

Using cost drivers simplifies the allocation of manufacturing overhead. The correct allocation of manufacturing overhead is important to determine the true cost of a product. Internal management uses the cost of a product to determine the prices of the products they produce. For this reason, the selection of accurate cost drivers has a direct impact on the profitability and operations of an entity.

Special Considerations: The Subjectivity of Cost Drivers

Management selects cost drivers as the basis for manufacturing overhead allocation. There are no industry standards stipulating or mandating cost driver selection. Company management selects cost drivers based on the variables of the expenses incurred during production.

The Bottom Line

Examining activity cost drivers helps companies to reduce unnecessary expenses and get to grips with how much an order really costs. The importance of accessing this knowledge shouldn’t be understated. The ultimate goal is to maximize profits; a key way to accomplish this is by being aware of all expenses and keeping them in check.

What Is an Application Programming Interface (API)?

An application programming interface (API) is a set of programming codes that queries data, parse responses, and sends instructions between one software platform and another. APIs are used extensively in providing data services across a range of fields and contexts.

APIs have become increasingly popular tools, with the likes of Meta (formerly Facebook), Amazon, SalesForce, and many more establishing their own APIs that allow companies to access some of their services without having to fully migrate into their ecosystem. This new paradigm has led to the rise of what some experts call the “API economy,” a model that enhances a company’s bottom line by improving interoperability and thus creating new systems from existing ones.

In the domain of financial markets and trading, one may use an API to establish a connection between a set of automated trading algorithms and the trader’s preferred trading broker platform for the purpose of obtaining real-time quotes and pricing data or to place electronic trades.

Understanding Application Programming Interfaces (APIs)

APIs have become increasingly popular with the rise of automated trading systems. In the past, retail traders were forced to screen for opportunities in one application and separately place trades with their broker. Many retail brokers now provide APIs that enable traders to directly connect their screening software with the brokerage account to share real-time prices and place orders. Traders can even develop their own applications using programming languages like Python and execute trades using a broker’s API.

Two types of traders use broker APIs:

• Third-Party Applications – Many traders use third-party applications that require access to broker APIs for pricing data and placing trades. For example, MetaTrader is one of the most popular foreign exchange (forex) trading applications and requires API access to secure real-time pricing and place trades.
• Developer Applications – A growing number of traders develop their own automated trading systems, using programming languages like Python, and require a way to access pricing data and place trades.

Despite the apparent benefits of APIs, there are many risks to consider. Most APIs are provided to a broker’s customers free of charge, but there are some cases where traders may incur an extra fee. It’s important to understand these fees before using the API.

Traders should also be aware of any API limitations, including the potential for downtime, which could significantly affect trading results.

Where to Find APIs for Traders

The most popular brokers supporting API access in the traditional stock and futures markets include TradeStation, TDAmeritrade, and InteractiveBrokers, but many smaller brokers have expanded access over time. APIs are more common among forex brokers where third-party applications and trading systems—such as MetaTrader—have been commonly used for many years.

Many brokers provide online documentation for their APIs. Developers can find out exactly how to authenticate with the API, what data is available for consumption, how to place orders through the API, and other technical details. It’s essential to be familiar with these details before choosing a broker when looking for specific functionality.

Some brokers also provide libraries in various languages to make interaction with their API easier. For example, a broker may offer a Python library that provides a set of functions, or methods, for placing a trade rather than having to write your own functions to do so. This can help accelerate the development of trading systems and make them less costly to develop.