#stocks

Activity Ratios

Activity ratios measure company sales per another asset account - the most common asset accounts used are accounts receivable, inventory, and total assets...

by William C. Spaulding

Discounted Cash Flow Formula

One method of estimating the value of an asset or a business is by calculating the discounted cash flow that the asset will earn.

by William C. Spaulding

Dividend Discount Model

Prices a stock by the sum of its future cash flows discounted by the required rate of return that an investor demands for the risk of owning the stock.

by William C. Spaulding

Dividends

Investors can earn a profit by buying stock in 2 ways, buy the stock low and sell it for a higher price, and by receiving dividends.

by William C. Spaulding

Earnings Yield

Is the inverse of the price-earnings ratio (P/E) of stocks, and equals earnings per share of common stock divided by the market price of the stock.

by William C. Spaulding

Economic Value Added

Economic value added (EVA) is the spread between a firms return on invested capital (ROIC) and the cost of capital multiplied by the total amount of capital invested.

by William C. Spaulding

Enterprise Value

is how much a company would cost, if it were bought outright

by William C. Spaulding

Equity Valuation - Book Value, Liquidation Value, and the Q Ratio

One measure to determine whether a stock is a good investment is whether the company is worth at least the value of all the outstanding stock at current market prices...

by William C. Spaulding

Execution, Clearing, and Settlement

Any transfer of financial instruments, such as stocks, in the primary or secondary markets involves 3 processes

by William C. Spaulding

Financial Ratios

Financial ratios measure liquidity, activity, leverage, and profitability of a company as a ratio to be able to compare it to other companies, other sectors, and other times.

by William C. Spaulding

Goodwill

a catchall phrase that refers to the value of the business over and above the value of its assets.

by William C. Spaulding

Investment Banking

A look behind the scenes of investment banking, from its origins to its current form.

by William C. Spaulding

Leverage Measures - Debt-Equity Ratios and Fixed-Charge Coverage Ratio

The amount of a companys debt affects its profitability and its ability to grow. Debt also incurs risk for both creditors and stockholders because of the potential for default, especially in hard economic times, ...

by William C. Spaulding

Liquidity Measures - Net Working Capital, Current Ratio, Quick Ratio, and Cash Ratio

Liquidity measures measure a firms ability to pay operating expenses and other short-term, or current, liabilities.

by William C. Spaulding

Present Value of Growth Opportunities

Stock prices depends on the companys return on equity, which depends on net earnings. But some companies pay most of their earnings as dividends

by William C. Spaulding

Price Per Earnings Ratio

Common stock ratios are based on financial data from income statements, balance sheets, or the cash flow statements of financial reports of the company

by William C. Spaulding

Profitability Ratios - Net Profit Margin, Return on Assets (ROA), Return on Equity (ROE)

The best measure of a company is its profitability, for without it, it cannot grow, and if it does not grow, then its stock will trend downward.

by William C. Spaulding

Secondary Securities Markets

After securities have been issued they are traded in the secondary markets

by William C. Spaulding

Security Analysts and Their Recommendations

Stock prices, especially those with high price-earnings ratios, are usually based on future expectations, which often originate from the recommendations of security analysts

by William C. Spaulding

Selling New Securities

Before a corporation can offer securities for sale to the public, it must register the offering with the SEC

by William C. Spaulding

Selling Short

most investors make money by buying a stock or other security at a low price, then selling it later for a higher price but some investors make money when the price of a stock falls.

by William C. Spaulding

Share Classes of Common Stock

Most companies issue common stock, each share having 1 voting right. But some companies issue different shares divided into different classes with different voting rights and is initially apportioned to different types of investors...

by William C. Spaulding

Stock Basics

Get yourself ready for the stock market and learn about common stocks, preferred stocks and other basic concepts

by William C. Spaulding

Types of Stocks

Blue chips or pink sheets, growth or cyclical, speculative or non speculative, there are many ways to categorize stocks.

by William C. Spaulding