Fundamental Definitions

  • Enterprise Value – The sum of claims of all claimants. Includes creditors (secured and unsecured) and equity holders.
  • EPS – Earnings per share. It is calculated as follows: (Net Income – Dividends on Preferred Stock)/Average Outstanding Shares.
  • EV/EBITDA – A comparison of enterprise value and earnings before interest, taxes, depreciation, and amortization.
  • EV/Revenue – A comparison of enterprise value and revenue.
  • Market Cap – The total value of the shares outstanding.
  • Net Income – The total earnings of the company. Calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes, and other expenses.
  • P/B – Ratio that compares the stock’s market value to its book value. Calculated as Current Closing Price/Latest Quarter’s Book Value Per Share.
  • P/E – Ratio that compares the stock’s current share price to its per-share earnings. Calculated as Market Value per Share/Earnings per Share (EPS).
  • PEG – A ratio used to determine a stock’s value with earnings growth over the past twelve months (TTM). Calculated as Price/Earnings (TTM) / Earnings per Share Growth (TTM).
  • Revenue – The amount of money that a company actually receives during a specific period. Includes discounts and deductions for returned merchandise.
  • Shares Outstanding – Number of stocks currently held by all its shareholders including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
  • Total Assets – The sum of all cash, investments, furniture, fixtures, equipment, receivables, intangibles, and any other items of value owned by the company.

 

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