Methodology
How StockCalc calculators work, what goes into the numbers, and what they cannot tell you.
How Our Calculators Work
Every calculator on StockCalc runs entirely in your browser using JavaScript. You enter values, and the calculator applies a standard financial formula to produce a result. No data is sent to any server.
Our formulas come from widely accepted definitions used in investment education, corporate finance textbooks, and regulatory filings. Each calculator page shows the specific formula it uses, along with worked examples and common pitfalls.
Education, not trading signals
StockCalc is built for learning and comparison, not for issuing trade ideas. Calculator output shows what the math says given your inputs—it does not tell you to buy, sell, or hold a security, and it is not a substitute for professional advice.
Different brokers and data vendors may use slightly different definitions (trailing vs. forward earnings, adjusted vs. reported figures). When results matter, cross-check inputs and definitions with a source you trust. See Data Sources for how we handle user-entered vs. displayed market data.
Formula Sources
The formulas we use are standard definitions found in sources such as:
- Corporate finance textbooks (Brealey, Myers & Allen; Damodaran)
- SEC and regulatory filing guidelines
- CFA Institute curriculum materials
- Publicly available financial education resources
We do not use proprietary models, machine learning predictions, or personalized algorithms. Each tool applies a single, well-documented formula to the inputs you provide.
What the Results Mean — and Don't Mean
Results depend on your inputs
If you enter incorrect or outdated numbers, the result will also be incorrect. Always verify your inputs against current, reliable sources.
Results are point-in-time snapshots
Most calculators do not pull live market data. If you need real-time prices, enter the latest figures manually from your broker or a market data provider.
Results exclude many real-world costs
Unless explicitly included in a calculator's inputs, our results do not account for taxes, brokerage commissions, bid-ask spreads, slippage, currency conversion fees, or inflation adjustments.
Context matters
A PE ratio of 15 might be cheap in one industry and expensive in another. A 10% ROI means something very different for a 1-month hold versus a 10-year hold. Always interpret results within the right context.
Results are not investment advice
StockCalc does not recommend buying, selling, or holding any security. No calculator output should be treated as a personalized recommendation or signal to act.
Key Assumptions by Calculator Type
| Calculator Type | Core Assumption | Common Limitation |
|---|---|---|
| Valuation (PE, PB, PEG, EV/EBITDA) | Uses the inputs you provide (price, earnings, book value, etc.) | Does not account for accounting policy differences, one-time items, or sector-specific norms |
| Return & Growth (CAGR, ROI, Compound Interest) | Assumes constant rate of return over the period | Real returns are volatile; past growth does not predict future growth |
| Income (Dividend, Yield) | Uses stated dividend amounts; does not adjust for special dividends or cuts | Dividends are never guaranteed and can be reduced or eliminated |
| Risk (Position Size, Sharpe, CAPM) | Relies on historical volatility and correlation inputs you provide | Future risk may differ significantly from historical patterns |
| DCF / IRR / NPV | Projects future cash flows based on your assumptions | Highly sensitive to discount rate and growth assumptions — small changes produce large output differences |
When Not to Use These Tools
- When you need real-time trading data or execution prices
- When making tax-related decisions (consult a tax professional)
- When evaluating complex derivatives, structured products, or private investments
- When the security has unusual share structures, warrants, or convertible instruments not reflected in the inputs
- As a substitute for professional financial, legal, or investment advice
Maintenance & Feedback
We regularly review and update our calculators to reflect common educational use cases. If you find an error in a formula, a broken calculator, or have a suggestion for a new tool:
Email: contact@stockcalc.xyz
Feedback form: stockcalc.xyz/feedback
Educational Disclaimer
All calculators, articles, and glossary definitions on StockCalc are for educational and informational purposes only. They do not provide investment, financial, tax, or legal advice. Results are based on user-provided inputs and standard formulas; they may not reflect real market conditions, fees, taxes, or risks. Always do your own research or consult a qualified professional before making financial decisions.
Related Pages
About StockCalc
Who we are and why we built this
Privacy Policy
How we handle your data
Terms of Service
Usage terms and conditions
Data Sources
Inputs, delays, and stock pages
Editorial Policy
How articles are produced
Disclaimer
Educational use, limits, and advertising
Contact
Corrections and feedback
All Calculators
Browse the full calculator library