Learn Before Invest
Financial literacy is the foundation of smart investing. Our platform offers guides, courses, and insights to help you understand market concepts, risks, and strategies before you put your money at stake.
Courses
Free resources to build your investing foundation
Income Investing
Build stable cash flow with dividends and interest.
What you'll learn
- Key concepts and frameworks
- Practical examples & charts
- Actionable takeaways
Stock Investing
Master fundamentals to pick long-term winners.
What you'll learn
- Key concepts and frameworks
- Practical examples & charts
- Actionable takeaways
Stock Trading
Learn technicals and strategies for active trading.
What you'll learn
- Key concepts and frameworks
- Practical examples & charts
- Actionable takeaways
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Tips & Formulas
37 essential financial metrics every investor should know
Definition: Market capitalization growth measures how much the total market value of a company's outstanding shares has increased over a specific period. It reflects investor confidence and business expansion.
Definition: Enterprise Value represents the total value of a company, including both equity and debt, minus cash. It is considered a more comprehensive measure than market cap alone because it accounts for what an acquirer would actually pay.
Definition: The last close price is the final price at which a stock traded during the most recent trading session. It serves as a reference point for the next trading day and is widely used in calculations for technical and fundamental analysis.
Definition: The Price-to-Earnings ratio shows how much investors are willing to pay per rupee of earnings. A high P/E may suggest the stock is overvalued or that investors expect high growth, while a low P/E may indicate undervaluation or slow growth.
Definition: Forward P/E uses expected future earnings rather than trailing earnings. It provides a forward-looking valuation and helps investors assess whether a stock is cheap or expensive relative to its anticipated profitability.
Definition: The Price-to-Sales ratio compares a company's stock price to its revenue per share. It is useful for valuing companies that do not yet have positive earnings, such as growth-stage firms.
Definition: The Price-to-Book ratio compares a stock's market value to its book value (net assets). A P/B below 1 may suggest undervaluation, while a high P/B could indicate the market expects strong future growth.
Definition: Similar to P/B, but excludes intangible assets like goodwill and patents. It provides a stricter measure of how the market values a company's hard, physical assets.
Definition: This ratio compares a stock's price to the free cash flow it generates per share. Free cash flow is the cash remaining after capital expenditures, making this ratio a strong indicator of a company's real value-generating ability.
Definition: This ratio compares a stock's price to its operating cash flow per share. Operating cash flow focuses on cash generated from core business operations, excluding investing and financing activities.
Definition: The PEG ratio adjusts the P/E ratio by accounting for the company's expected earnings growth rate. A PEG below 1 is generally considered undervalued, while above 1 may be overvalued relative to growth.
Definition: EV/Sales compares a company's enterprise value to its total revenue. It shows how much the market values each rupee of sales, considering debt and cash positions. Lower values may indicate better value.
Definition: EV/EBITDA compares enterprise value to earnings before interest, taxes, depreciation, and amortization. It is one of the most widely used valuation multiples, especially for comparing companies across different capital structures.
Definition: EV/EBIT compares enterprise value to operating earnings (EBIT). Unlike EV/EBITDA, it accounts for depreciation and amortization, making it more conservative and useful for capital-intensive industries.
Definition: EV/FCF compares enterprise value to free cash flow. Since free cash flow represents the actual cash available to all capital providers, this ratio is a strong indicator of whether a company is generating enough cash relative to its total value.
Definition: The Debt-to-Equity ratio measures how much debt a company uses compared to its shareholders' equity. A higher ratio indicates more leverage, which increases both risk and potential return.
Definition: This ratio measures how many years it would take a company to pay off its debt using EBITDA. A lower ratio means the company can service its debt more easily.
Definition: The Debt-to-Free-Cash-Flow ratio shows how many years of free cash flow would be needed to pay off all debt. It is a stricter measure than Debt/EBITDA because FCF accounts for capital expenditures.
Definition: Asset Turnover measures how efficiently a company uses its total assets to generate revenue. A higher ratio indicates better efficiency in using assets to produce sales.
Definition: Inventory Turnover shows how many times a company sells and replaces its inventory in a period. A higher ratio indicates efficient inventory management and strong demand.
Definition: The Quick Ratio measures a company's ability to meet short-term obligations using its most liquid assets (excluding inventory). A ratio above 1 means the company can cover its current liabilities without selling inventory.
Definition: The Current Ratio measures a company's ability to pay short-term obligations with its current assets. A ratio above 1 indicates the company has more current assets than current liabilities.
Definition: ROE measures how effectively a company uses shareholders' equity to generate profit. A higher ROE indicates better profitability relative to the equity invested by shareholders.
Definition: ROA shows how efficiently a company uses its assets to generate profit. Unlike ROE, it is not influenced by the company's debt level, making it useful for comparing companies with different capital structures.
Definition: ROIC measures how well a company generates returns on all the capital invested in its business, including both debt and equity. It is a key metric for assessing management's ability to allocate capital effectively.
Definition: ROCE evaluates how efficiently a company uses its capital (both equity and debt) to generate operating profits. It is especially useful for comparing companies in capital-intensive industries.
Definition: Gross Margin shows the percentage of revenue retained after deducting the direct cost of goods sold (COGS). It indicates how efficiently a company produces its goods or delivers its services.
Definition: Operating Margin measures the percentage of revenue remaining after all operating expenses (COGS + SG&A + depreciation). It shows how well management controls costs in day-to-day operations.
Definition: Net Profit Margin is the percentage of revenue that ends up as net income after all expenses, taxes, and interest are deducted. It is the ultimate bottom-line profitability measure.
Definition: FCF Margin measures the percentage of revenue converted into free cash flow. It reflects the company's ability to generate real cash from its operations after maintaining or expanding its asset base.
Definition: EBITDA Margin shows the percentage of revenue remaining as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). It strips out the effects of financing, accounting, and tax decisions, giving a clean view of operational profitability.