Investing glossary

Total value of all shares: price times shares outstanding.

Market cap plus total debt minus cash. Roughly what it would cost to buy the whole business.

Price to earnings. Share price divided by earnings per share. Higher means investors pay more per dollar of profit.

Price to sales. Market cap divided by revenue. Useful when profit is thin or negative.

Price to book. Share price divided by book value per share (assets minus liabilities).

Enterprise value divided by EBITDA. A valuation multiple that ignores capital structure.

A discounted-cash-flow estimate of intrinsic value: project future free cash flow and discount it back to today, then divide by shares.

Gross profit as a percent of revenue.

Operating income as a percent of revenue.

Net income as a percent of revenue.

Net income divided by shareholder equity.

Cash from operations minus capital expenditures.

Earnings per share over the trailing twelve months.

Compound annual growth rate: the smoothed yearly rate at which a figure grew over a period.

Current assets divided by current liabilities. Above 1 means short-term assets cover short-term bills.

Total debt divided by shareholder equity. Higher means more leverage.

Operating income divided by interest expense. How many times over profits cover interest.

Total debt minus cash. Negative means more cash than debt.

Annual dividends per share as a percent of the current share price.

The share of earnings paid out as dividends. Lower leaves more room to keep paying and growing the dividend.

How much the stock moves relative to the market. 1 moves with the market, above 1 is more volatile.

Relative Strength Index. Momentum from 0 to 100. Below 30 is often oversold, above 70 overbought.

Moving Average Convergence Divergence. Trend momentum from the gap between two moving averages.

Simple Moving Average. The average closing price over a set number of days.

Stochastic oscillator. Where price sits within its recent high to low range, from 0 to 100.