Clear definitions, formulas, and examples for every stock and investment term. Click any term to learn more.
Total company value
Revenue-based valuation
Weighted Average Cost of Capital
How to value a company
Price-to-Earnings ratio
Price-to-Book ratio
Earnings Per Share
Total market value
Enterprise Value to EBITDA
PE adjusted for growth
EPS including dilutive securities
Annual dividend as % of price
% of earnings paid as dividends
Buying for the dividend payout
25+ years of dividend growth
Reinvesting dividends automatically
Compound Annual Growth Rate
Return on Investment
Return on Equity
Return on Assets
Cash after capital expenditures
Capital Asset Pricing Model
Risk-adjusted return measure
Interest on interest
Smoothed price trend indicator
Relative Strength Index
Key price levels
Shares traded per period
Stock volatility vs market
Annual price range
Automatic sell order
Buy and sell orders queue
Rising vs falling markets
Large, established companies
Exchange-Traded Fund
Passive market tracking
Dollar Cost Averaging strategy
Rising prices over time
Initial Public Offering
Dividing existing shares
How easily you can buy/sell
Quarterly financial results
Economic downturn
Rotating investments by cycle
Bond yield vs maturity
Diversifying across asset classes
Tax on investment profits
Order types explained
Borrowing to invest
Betting on price declines
Financial leverage measure
Trading contracts, not shares
Right to buy at a set price
Right to sell at a set price
Delta, Gamma, Theta, Vega
Market's expectation of future volatility
Options pricing formula
Active investment partnerships
Pooled investment vehicles
Return from bond investments
US government debt securities
Issuer creditworthiness grade
Hybrid equity-debt security
Total income from sales
Revenue minus cost of goods
Profit from core operations
Bottom-line profitability
Earnings before interest, tax, depreciation
Allocating asset cost over time
Spreading intangible asset cost
Money in and out of a business
Short-term financial health
Profits kept in the company
Owners' residual claim
Net asset value per share
Buying undervalued stocks
Investing in fast-growing companies
Growing income stream
Dividend Reinvestment Plan
Buy and hold strategy
Which strategy works better?
Reducing risk through variety
Resetting your allocation
True underlying worth
Can you beat the market?
Extra return for taking risk
Measuring return volatility
How assets move together
Peak-to-trough decline
Excess return above benchmark
Profit from selling assets
Tax on dividend income
Company repurchasing shares
Market vs book value