Total Assets
The sum of all current and long-term assets held by a company. An asset is any item with economic value that is held by a company.
Reference: https://ycharts.com/glossary/terms/assets
Total Liabilities
Total liabilities are the combined debts and obligations that an individual or company owes to outside parties. Everything the company owns is classified as an asset and all amounts the company owes for future obligations are recorded as liabilities. On the balance sheet, total assets minus total liabilities equals equity.
Total liabilities are the combined debts that an individual or company owes. They are generally broken down into three categories: short-term, long-term, and other liabilities. On the balance sheet, total liabilities plus equity must equal total assets.
Reference: https://www.investopedia.com/terms/t/total-liabilities.asp
Total Equity
Equity, typically referred to as shareholders’ equity (or owners’ equity for privately held companies), represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt was paid off in the case of liquidation. In the case of acquisition, it is the value of company sales minus any liabilities owed by the company not transferred with the sale.
Equity represents the value that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debts were paid off. We can also think of equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset. Equity represents the shareholders’ stake in the company, identified on a company’s balance sheet. The calculation of equity is a company’s total assets minus its total liabilities, and is used in several key financial ratios such as ROE.
Reference: https://www.investopedia.com/terms/e/equity.asp
Book Value Per Share (BVPS)
Book value per share (BVPS) is the ratio of equity available to common shareholders divided by the number of outstanding shares. This figure represents the minimum value of a company’s equity and measures the book value of a firm on a per-share basis.
Book value per share (BVPS) takes the ratio of a firm’s common equity divided by its number of shares outstanding. Book value of equity per share effectively indicates a firm’s net asset value (total assets – total liabilities) on a per-share basis. When a stock is undervalued, it will have a higher book value per share in relation to its current stock price in the market. BVPS is used mainly by stock investors to evaluate a company’s stock price.
Reference: https://www.investopedia.com/terms/b/bvps.asp
Total Debt
Debt is something, usually money, borrowed by one party from another. Debt is used by many corporations and individuals to make large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest.
Debt is money borrowed by one party from another. Many corporations and individuals use debt as a method of making large purchases that they could not afford under normal circumstances. In a debt-based financial arrangement, the borrowing party gets permission to borrow money under the condition that it must be paid back at a later date, usually with interest. Debt can be classified into four main categories: secured, unsecured, revolving, or mortgaged. Corporations issue debt in the form of bonds to raise capital.
Reference: https://www.investopedia.com/terms/d/debt.asp
Total Revenue
Revenue is the money generated from normal business operations, calculated as the average sales price times the number of units sold. It is the top line (or gross income) figure from which costs are subtracted to determine net income. Revenue is also known as sales on the income statement.
Revenue, often referred to as sales or the top line, is the money received from normal business operations. Operating income is revenue (from the sale of goods or services) less operating expenses. Non-operating income is infrequent or nonrecurring income derived from secondary sources (e.g., lawsuit proceeds).
Reference: https://www.investopedia.com/terms/r/revenue.asp
Currents Assets
Current assets represent all the assets of a company that are expected to be conveniently sold, consumed, used, or exhausted through standard business operations with one year. Current assets appear on a company’s balance sheet, one of the required financial statements that must be completed each year. Current assets would include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. Current assets may also be called current accounts.
Current assets are all the assets of a company that are expected to be sold or used as a result of standard business operations over the next year. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. Current assets are important to businesses because they can be used to fund day-to-day business operations and to pay for the ongoing operating expenses.
Reference: https://www.investopedia.com/terms/c/currentassets.asp
Gross Profit
Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company’s income statement and can be calculated by subtracting the cost of goods sold (COGS) from revenue (sales). These figures can be found on a company’s income statement. Gross profit may also be referred to as sales profit or gross income.
Gross profit, also called gross income, is calculated by subtracting the cost of goods sold from revenue. Gross profit only includes variable costs and does not account for fixed costs. Gross profit assesses a company’s efficiency at using its labor and supplies in producing goods or services.
Reference: https://www.investopedia.com/terms/g/grossprofit.asp
Profit Margin
Profit margin is one of the commonly used profitability ratios to gauge the degree to which a company or a business activity makes money. It represents what percentage of sales has turned into profits. Simply put, the percentage figure indicates how many cents of profit the business has generated for each dollar of sale. For instance, if a business reports that it achieved a 35% profit margin during the last quarter, it means that it had a net income of $0.35 for each dollar of sales generated.
Profit margin gauges the degree to which a company or a business activity makes money, essentially by dividing income by revenues. Expressed as a percentage, profit margin indicates how many cents of profit has been generated for each dollar of sale. While there are several types of profit margin, the most significant and commonly used is net profit margin, a company’s bottom line after all other expenses, including taxes and one-off oddities, have been removed from revenue. Profit margins are used by creditors, investors, and businesses themselves as indicators of a company’s financial health, management’s skill, and growth potential. As typical profit margins vary by industry sector, care should be taken when comparing the figures for different businesses.
Reference: https://www.investopedia.com/terms/p/profitmargin.asp
Common Shares Outstanding
Shares outstanding refer to a company’s stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.”
Shares outstanding refer to a company’s stock currently held by all its shareholders. These include share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. A company’s number of shares outstanding is not static and may fluctuate wildly over time.
Reference: https://www.investopedia.com/terms/o/outstandingshares.asp
Float Shares Outstanding
Floating stock is the most narrow number of a company’s shares. This measure excludes closely-held shares that are held by company insiders or controlling investors. These stockholders typically include officers, directors, and company-sponsored foundations.
Many companies provide authorized shares, outstanding shares, and floating shares within the shareholders’ equity portion of their balance sheet. Shares outstanding is the total number of shares issued and actively held by stockholders. Floating stock is the result of subtracting closely-held shares from the total shares outstanding to provide a narrower view of a company’s active shares. Floating stock shares are used in free float capitalization index calculations. It can be important to consider a company’s floating stock percentage when analyzing its stock for investment.
Short Ratio
Knowing how many shares of a stock have been shorted is a good indication of how investors view that stock. That’s where the short ratio comes in handy. Also known as the “days to cover” ratio, the short ratio is calculated by dividing the number of shares sold short by the average daily trading volume.
Reference: https://www.fool.com/knowledge-center/what-is-a-short-ratio.aspx
Enterprise Value
Enterprise value (EV) is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet. Enterprise value is a popular metric used to value a company for a potential takeover.
Enterprise value (EV) is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization. Enterprise value includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet. Enterprise value is used as the basis for many financial ratios that measure the performance of a company.
Reference: https://www.investopedia.com/terms/e/enterprisevalue.asp
Free Cash Ratio
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet.
Free cash flow (FCF) represents the cash available for the company to repay creditors or pay dividends and interest to investors. FCF reconciles net income by adjusting for non-cash expenses, changes in working capital, and capital expenditures (CAPEX). However, as a supplemental tool for analysis, FCF can reveal problems in the fundamentals before they arise on the income statement.
Reference: https://www.investopedia.com/terms/f/freecashflow.asp
Current Ratio
The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.
A current ratio that is in line with the industry average or slightly higher is generally considered acceptable. A current ratio that is lower than the industry average may indicate a higher risk of distress or default. Similarly, if a company has a very high current ratio compared to its peer group, it indicates that management may not be using its assets efficiently.
Reference: https://www.investopedia.com/terms/c/currentratio.asp
Quick Ratio
The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets. Since it indicates the company’s ability to instantly use its near-cash assets (assets that can be converted quickly to cash) to pay down its current liabilities, it is also called the acid test ratio. An “acid test” is a slang term for a quick test designed to produce instant results.
The quick ratio measures a company’s capacity to pay its current liabilities without needing to sell its inventory or obtain additional financing. The quick ratio is considered a more conservative measure than the current ratio, which includes all current assets as coverage for current liabilities. The higher the ratio result, the better a company’s liquidity and financial health; the lower the ratio, the more likely the company will struggle with paying debts.
Reference: https://www.investopedia.com/terms/q/quickratio.asp
PE Ratio
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
The price-to-earnings (P/E) ratio relates a company’s share price to its earnings per share. A high P/E ratio could mean that a company’s stock is overvalued, or else that investors are expecting high growth rates in the future. Companies that have no earnings or that are losing money do not have a P/E ratio because there is nothing to put in the denominator. Two kinds of P/E ratios—forward and trailing P/E—are used in practice.
Reference: https://www.investopedia.com/terms/p/price-earningsratio.asp
PS Ratio
The price-to-sales (P/S) ratio shows how much investors are willing to pay per dollar of sales for a stock. The P/S ratio is calculated by dividing the stock price by the underlying company’s sales per share. A low ratio could imply the stock is undervalued, while a ratio that is higher-than-average could indicate that the stock is overvalued. One of the downsides of the P/S ratio is that it doesn’t take into account whether the company makes any earnings or whether it will ever make earnings.
The price-to-sales (P/S) ratio shows how much investors are willing to pay per dollar of sales for a stock. The P/S ratio is calculated by dividing the stock price by the underlying company’s sales per share. A low ratio could imply the stock is undervalued, while a ratio that is higher-than-average could indicate that the stock is overvalued. One of the downsides of the P/S ratio is that it doesn’t take into account whether the company makes any earnings or whether it will ever make earnings.
Reference: https://www.investopedia.com/terms/p/price-to-salesratio.asp
PB Ratio
Companies use the price-to-book ratio (P/B ratio) to compare a firm’s market capitalization to its book value. It’s calculated by dividing the company’s stock price per share by its book value per share (BVPS). An asset’s book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.
The P/B ratio measures the market’s valuation of a company relative to its book value. The market value of equity is typically higher than the book value of a company, P/B ratio is used by value investors to identify potential investments. P/B ratios under 1 are typically considered solid investments.
Reference: https://www.investopedia.com/terms/p/price-to-bookratio.asp
Interest Coverage
The interest coverage ratio is a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt. The interest coverage ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expense during a given period.
The interest coverage ratio is used to measure how well a firm can pay the interest due on outstanding debt. The interest coverage ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expense during a given period. Some variations of the formula use EBITDA or EBIAT instead of EBIT to calculate the ratio. Generally, a higher coverage ratio is better, although the ideal ratio may vary by industry.
Reference: https://www.investopedia.com/terms/i/interestcoverageratio.asp
Gross Margin
Gross margin is net sales less the cost of goods sold (COGS). In other words, it’s the amount of money a company retains after incurring the direct costs associated with producing the goods it sells and the services it provides. The higher the gross margin, the more capital a company retains, which it can then use to pay other costs or satisfy debt obligations. The net sales figure is gross revenue, less the returns, allowances, and discounts.
Gross margin equates to net sales minus the cost of goods sold. The gross margin shows the amount of profit made before deducting selling, general, and administrative (SG&A) costs. Gross margin can also be called gross profit margin, which is gross profit divided by net sales.
Reference: https://www.investopedia.com/terms/g/grossmargin.asp
Debt to Equity Ratio
The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. The D/E ratio is an important metric used in corporate finance. It is a measure of the degree to which a company is financing its operations through debt versus wholly owned funds. More specifically, it reflects the ability of shareholder equity to cover all outstanding debts in the event of a business downturn. The debt-to-equity ratio is a particular type of gearing ratio.
The debt-to-equity (D/E) ratio compares a company’s total liabilities to its shareholder equity and can be used to evaluate how much leverage a company is using. Higher-leverage ratios tend to indicate a company or stock with higher risk to shareholders. However, the D/E ratio is difficult to compare across industry groups where ideal amounts of debt will vary. Investors will often modify the D/E ratio to focus on long-term debt only because the risks associated with long-term liabilities are different than short-term debt and payables.
Reference: https://www.investopedia.com/terms/d/debtequityratio.asp
PEG Ratio (Price to Earnings Ratio)
The price/earnings to growth ratio (PEG ratio) is a stock’s price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. The PEG ratio is used to determine a stock’s value while also factoring in the company’s expected earnings growth, and it is thought to provide a more complete picture than the more standard P/E ratio.
The PEG ratio enhances the P/E ratio by adding in expected earnings growth into the calculation. The PEG ratio is considered to be an indicator of a stock’s true value, and similar to the P/E ratio, a lower PEG may indicate that a stock is undervalued. The PEG for a given company may differ significantly from one reported source to another, depending on which growth estimate is used in the calculation, such as one-year or three-year projected growth.
Reference: https://www.investopedia.com/terms/p/pegratio.asp
Price to Sales Forward Ratio
Forward Price to Sales Ratio is the current stock price over the predicted sales per share. While similar to the price to sales ratio, this is a forward looking estimate of a company’s sales. A forward P/S ratio that is higher than the current P/S ratio means that that sales are expected to decrease at the next period.
Reference: https://ycharts.com/glossary/terms/forward_ps_ratio
Price to Earnings Forward Ratio
The Forward Price to Earnings (PE) Ratio is similar to the price to earnings ratio. The regular P/E ratio is a current stock price over its earnings per share. The forward P/E ratio is a current stock’s price over its “predicted” earnings per share. If the forward P/E ratio is higher than the current P/E ratio, it indicates decreased expected earnings.
Reference :https://ycharts.com/glossary/terms/forward_pe_ratio
