Float time

Float time in finance (also public float) is an investment indicator expressed as a percentage and is the ratio of shares remaining in free public circulation to all shares issued by the enterprise. Free float is a distributed shareholding structure of a given public enterprise. The free float ratio determines what percentage of shares in a listed company is in free float, that is, for individual investors who make up distributed shareholding, with less than 5% of the share capital of the company.

Float time (also calles slack time) in project management has two forms:

• Total float (TF) - called also simply float is the amount of time you can delay the start of the task without delaying the earliest start of the project
• Free float (FF) - can occur when multiple tasks are predecessors of one task. In that case some of tasks can have additional reserve: early start of successor minus early finish of predecessor

Float time in Critical Path Method

Critical Path Method (CPM) is a schedule network analysis technique that specifies the floating-point quantity or schedule flexibility for each network path by calculating the earliest start date, the earliest end date, the last start date, and the last end date for each activity. This technique is based on sequential networks and the estimated duration of a single for each activity.

The longest full path of the project is the Critical Path (CP). Any project activity with a float time of zero is considered as a critical path task. The critical path may change under the following conditions:

• When a result of having used up all their float time are actions which become tasks on the critical path.
• When the milestone for critical is not met

Examples of Float time

• Float time in finance is the amount of time that elapses between the announcement and execution of a trade. It is usually measured in seconds or fractions of a second. For example, if a trade is executed and announced within one second, the float time would be one second.
• Float time is also used to describe the amount of time between the decision to buy or sell a security and the actual execution of the trade. In this case, the float time is usually measured in hours or days. For example, if an investor decides to buy a stock at 9am and the trade is executed at 10am, the float time would be one hour.
• Float time is also used to describe the amount of time it takes for a security to be traded from one market to another. In this case, the float time is usually measured in days or weeks. For example, if a security is traded from the NYSE to the Nasdaq, the float time could be two weeks.

Advantages of Float time

Float time in finance is an important indicator of a company's liquidity and market capitalization, and provides investors with important information on the company's shareholding structure. It is also important for companies to understand their float time and the implications it can have on their public image. The following are some of the key advantages of float time:

• Float time helps to ensure that all shareholders have access to the same information and that the company's shares remain fairly priced. This helps to protect the interests of all shareholders and prevent any potential conflicts of interest.
• Float time also helps to ensure that the company's share prices remain stable and more resistant to market fluctuations. This can help to attract more investors and ensure that the company is seen as a reliable investment.
• Float time also helps to ensure that the company meets regulatory requirements. Companies must meet certain requirements for their float time before they are allowed to be listed on the stock exchange. This helps to protect investors and ensure that the company is compliant with all regulations.
• Float time also helps to ensure that the company's share prices are not affected by large shareholders. This helps to protect the interests of minority shareholders who may not have the same influence as larger shareholders.

Limitations of Float time

• Float time in finance can be limited by the availability of investor capital, as if there is not enough capital available to purchase the company's shares, the free float ratio will be significantly lower.
• Float time can be affected by insider trading, as if insiders are buying and selling their own shares, it can reduce the free float ratio and make it more difficult for individual investors to purchase shares.
• Float time can be affected by the number of shares issued. If a company issues too many shares, it can reduce the free float ratio and make it more difficult for individual investors to purchase shares.
• Float time can also be affected by the liquidity of the stock. If the stock is not liquid enough, it can limit the ability of individual investors to purchase shares and reduce the free float ratio.

Other approaches related to Float time

Float time in finance is often associated with the following approaches:

• Fundamental analysis - a method of analyzing a company's financial statements and other data to determine its intrinsic value.
• Technical analysis - a method of analyzing price and volume data to predict future price movements.
• Value investing - an investment strategy based on buying stocks that are undervalued relative to their intrinsic value.
• Momentum investing - a method of investing based on buying stocks that have recently outperformed the market.
• Index investing - a method of investing in a basket of stocks that are selected according to their performance or other criteria.

In conclusion, float time in finance is used to measure the public float ratio of a company and is a key indicator of investor sentiment. It is used in conjunction with other approaches, such as fundamental analysis, technical analysis, value investing, momentum investing, and index investing, to assess the market potential of a stock.

Float time — recommended articles

Swap Ratio — Vomma — Capped Index — Blended Rate — Span margin — Trading Book — Capital market theories — Market Risk Premium — Technical correction

References

• Chen, S. M., & Chang, T. H. (2001). Finding multiple possible critical paths using fuzzy PERT. IEEE Transactions on Systems, Man, and Cybernetics, Part B (Cybernetics), 31(6), 930-937.
• Heldman, K., Mangano, V. (2011). PMP: Project Management Professional Exam Review Guide
• Lord, S. M., (2010). Review of the Department of Homeland Security's Certification of the Secure Flight Program: Cost and Schedule Estimates, 16-18

Footnotes

Author: Anna Mrajca