Fundamentals
P/E, EPS, DCF, earnings reports, and financial ratios
45 articles in this category
P/E Ratio Explained: How to Value Stocks Using Price-to-Earnings
The P/E ratio is the most widely used valuation metric. Learn how to calculate, interpret, and compare price-to-earnings ratios across different stocks.
Current Ratio: Formula, Interpretation & What's a Good Number
The current ratio measures a company's ability to pay short-term debts. Learn the formula, what good and bad ratios look like, and how to use it.
Debt-to-Equity Ratio: Formula, Calculation & Analysis
The debt-to-equity ratio shows how much a company relies on debt. Learn to calculate it, interpret results, and compare across industries.
Return on Assets (ROA): Formula, Calculation & Examples
ROA measures how efficiently a company uses assets to generate profit. Learn the formula, what good ROA looks like, and how to compare across sectors.
Earnings Per Share (EPS): What It Means & How to Use It
EPS shows how much profit a company earns per share. Learn the formula, basic vs diluted EPS, and how earnings per share drives stock prices.
Discounted Cash Flow (DCF): How to Value a Stock
DCF analysis estimates a stock intrinsic value using future cash flows. Learn the step-by-step process of building a discounted cash flow model.
How to Trade Earnings Reports: Before, During & After
Earnings reports create the biggest single-day moves. Learn how to prepare for earnings, interpret results, and trade the reaction profitably.
Revenue vs Earnings vs Net Income: What Traders Watch
Revenue, earnings, and net income are different things. Learn what each means, how they relate, and which ones move stock prices the most.
Sharpe Ratio: Measuring Risk-Adjusted Returns
The Sharpe ratio measures return per unit of risk. Learn the formula, what good and bad ratios look like, and how to evaluate trading strategy performance.
CAGR Formula: How to Calculate Compound Annual Growth Rate
CAGR smooths out returns to show the annualized growth rate. Learn the formula, how to calculate it, and how to use it to compare investments.
Return on Equity (ROE): Formula, Meaning & What's Good
ROE measures how efficiently a company turns shareholder equity into profit. Learn the formula, what a good ROE looks like, and how to use it in analysis.
Gross Margin: Formula, Interpretation & Sector Benchmarks
Gross margin shows what percentage of revenue remains after cost of goods sold. Learn the formula, sector benchmarks, and how to use it for analysis.
Enterprise Value: Why It's Better Than Market Cap for Valuation
Enterprise value includes debt and cash to give a truer picture of a company's total value. Learn the formula, EV/EBITDA, and why analysts prefer it.
What Is EBITDA? How to Use It for Stock Analysis
EBITDA strips out non-operating costs to show core operating profitability. Learn the formula, how it is used in valuation, and its limitations.
Free Cash Flow (FCF): The Most Important Number in Finance
Free cash flow is the cash a company generates after capital expenditures. Learn why many analysts consider it the single most important financial metric.
Intrinsic Value: How to Calculate What a Stock Is Really Worth
Intrinsic value is what a stock is truly worth based on fundamentals. Learn multiple methods to calculate it and find undervalued opportunities.
How to Read a Balance Sheet: Assets, Liabilities & Equity
The balance sheet shows what a company owns and owes at a point in time. Learn to read assets, liabilities, and equity like a fundamental analyst.
How to Read an Income Statement: Revenue to Net Income
The income statement tells you how much a company earned and spent over a period. Learn to read it from revenue to net income like a pro.
Beta in Stocks: What It Means & How to Use It for Risk
Beta tells you how much a stock moves relative to the market. A beta of 1.5 means 50% more volatile than the S&P 500.
Price-to-Book Ratio (P/B): Formula, Meaning & When to Use It
P/B ratio compares what you pay for a stock to what it's worth on the books. Below 1.0 may signal undervaluation.
Price-to-Sales Ratio (P/S): Valuing Stocks Without Earnings
When a company has no earnings, P/E is useless. P/S ratio lets you value stocks by revenue instead.
Rule of 72: How to Estimate When Your Money Doubles
Divide 72 by your annual return rate and you get the approximate years to double your money. Simple but powerful.
Treynor Ratio: Measuring Risk-Adjusted Returns Against Beta
The Treynor ratio rewards returns earned per unit of market risk. Higher is better — but only for diversified portfolios.
Shareholders' Equity: What It Is & How to Analyze It
Shareholders' equity represents what's left for owners after all debts are paid. It's the company's net worth.
Working Capital: Formula, Meaning & Why It Matters
Working capital = current assets minus current liabilities. Positive means the company can cover its short-term obligations.
Operating Margin: Formula, Benchmarks & Industry Comparisons
Operating margin reveals how efficiently a company turns revenue into operating profit. Higher margins mean more pricing power.
Book Value: What a Stock Is Worth on Paper
Book value is what a company is worth based on its accounting records — total assets minus total liabilities.
Market Value vs Book Value: Why They Differ & What It Means
Market value is set by supply and demand. Book value is set by accountants. The gap between them tells a story.
Risk Premium: Formula, Types & Why It Drives Stock Returns
The risk premium is the extra return you earn for taking on risk beyond the risk-free rate. Learn the formula and how it drives stock prices.
Efficient Market Hypothesis: What It Claims & Why Traders Disagree
The EMH claims stock prices already reflect all known information. Learn the three forms and why active traders disagree.
PEG Ratio: How to Value Growth Stocks with One Number
The PEG ratio adjusts the P/E for growth, making it easier to compare companies growing at different rates.
Forward P/E Ratio: Valuing Stocks on Future Earnings
Forward P/E uses analyst estimates of next year's earnings. Learn when it is more useful than trailing P/E and its pitfalls.
P&L Statement: How Traders Track Performance
Your P&L statement shows every dollar earned and lost. Learn how traders build and analyze their own profit and loss records.
Rate of Return: Formula, Types & How to Calculate
Rate of return measures your investment gain or loss as a percentage. Learn the formulas for simple, annualized, and compound returns.
Return of Capital: What It Is & How It Affects Your Tax Basis
Return of capital gives you back your own money, not earnings. Learn how it reduces your cost basis and defers taxes.
Standard Deviation in Trading: Measuring Price Volatility
Standard deviation quantifies how much returns vary from the mean. Learn how traders use it to measure risk and volatility.
Price Targets: How Analysts Set Them & How Traders Use Them
Price targets are analyst forecasts of future stock prices. Learn how they are set and how much weight to give them.
CDOs Explained: The Instrument That Fueled the 2008 Crash
CDOs package debt into slices ranked by risk. Learn how they work, why they triggered the 2008 financial crisis, and their legacy.
SG&A Expenses: What They Are & Why They Matter
SG&A covers salaries, rent, marketing, and other overhead. It reveals how efficiently a company operates.
Diluted Shares & Diluted EPS: Accounting for All Potential Shares
Diluted share count includes stock options, warrants, and convertibles. Diluted EPS gives the conservative view.
10-K vs 10-Q: Annual & Quarterly SEC Filings Compared
The 10-K is audited and comprehensive. The 10-Q is shorter and unaudited. Both are essential for fundamental analysis.
What Is the Current Ratio?
The current ratio is a liquidity metric that measures a company's ability to pay its short-term obligations using its short-term assets.
What Is Enterprise Value?
Enterprise Value (EV) measures a company's total value including debt and subtracting cash — the theoretical acquisition price of the entire business.
What Is Return on Equity?
Return on Equity (ROE) is one of the most important profitability metrics, measuring how effectively a company turns shareholders' equity into profits.
What Is Shareholders' Equity?
Shareholders' equity represents the net worth of a company from an accounting perspective — total assets minus total liabilities.