eTrade 2005 Annual Report Download - page 36

Revenue growth
15
%
10
%
6
%
5
%
Revenue per compensation and benefits
dollar
$
4.47
$
4.23
$
3.68
6
%
(1)
Our average commission per trade is calculated by dividing retail segment commission revenues by the number of total retail trades.
(2)
We define a product as an account, an account feature that generates revenue, such as a margin-enabled account, or an account function that creates a deeper customer relationship, such
as bill pay.
(3)
Our operating margin is calculated by dividing our income before other income, income taxes, minority interest, discontinued operations and cumulative effect of accounting change by
our total net revenues.
•
Customer Activity Metrics
•
Retail client assets are the market value of all client assets housed by us. Retail client assets include security holdings, cash
(including money market funds), vested unexercised options and deposits. The level of client assets is an indicator of the value
of our relationship with the customer. An increase in client assets indicates that existing and new customers are expanding use
of our services.
•
Daily Average Revenue Trades (“DARTs”) are an indicator of the volume of transactions our retail customers conduct and are
the predominant driver of commissions revenue.
•
Average commission per trade is impacted by the mix between and within our retail domestic and international businesses. This
is an indicator of changes to our customer mix and reflects the impact of changes to pricing.
•
Customer cash and deposits are the balances of all customer cash, including deposits, free credits held and money market
balances held in outside funds. Free credits represent credit balances in customer accounts arising from deposits of funds and
sales of securities. Management considers cash and deposits to be indicative of the deepening engagement with our customers
and in addition, this balance is a key driver of net interest income.
21
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2006. EDGAR Online, Inc.