Financial metrics, explained
Every figure the screener and the company pages print, with the formula it is actually computed with and the ways it misleads.
The ten read first, with ten filed years per company
- Return on invested capital - After-tax operating profit as a percentage of the capital invested in the business: shareholders' equity plus debt, less cash.
- Return on equity - Profit earned for every unit of shareholders money left in the business.
- Free cash flow yield - The cash left after capital spending, expressed as a percentage of what the shares cost.
- Enterprise value to EBIT - What a buyer of the whole company pays for one unit of operating profit, after depreciation has been charged.
- Price to earnings - What you pay for one unit of last year's profit.
- Gross margin - What is left of each unit of revenue after the direct cost of producing it.
- Operating margin - What is left of each unit of revenue after every cost of running the business, before interest and tax.
- Net debt to EBITDA - How many years of pre-tax, pre-depreciation earnings it would take to repay borrowings net of cash.
- Revenue growth, five years - The compound annual rate at which revenue grew over five years.
- Share count change - How much the diluted share count changed over the year.
Valuation
- Price to earnings
- Price to book
- Price to sales
- Price to cash flow
- Price to free cash flow
- Price to earnings over growth
- Enterprise value to EBITDA
- Enterprise value to revenue
- Enterprise value to free cash flow
- Enterprise value to EBIT
- Earnings yield
- Free cash flow yield
- Owner earnings yield
- Gross profit to enterprise value
- Cash to market value
- Graham number
- Normalised price to earnings
- Price to tangible book
- Price to Graham number
- Price to net current asset value
- Enterprise value to invested capital
- Dividend yield
- Dividend rate
- Buyback yield
- Shareholder yield
- Net current asset value per share
- Owner earnings
- Weighted average cost of capital
- Share count change
- Cyclically adjusted price to earnings
Quality and returns
- Return on equity
- Return on assets
- Return on invested capital
- Return on capital employed, pre-tax
- Gross margin
- Operating margin
- Net margin
- EBITDA margin
- Free cash flow margin
- Operating cash flow margin
- Return on tangible assets
- After-tax operating margin
- Incremental return on invested capital
- Capital efficiency
- Gross profit per employee
- Gross margin stability
- Gross margin trend
- Net margin trend
- Return on capital consistency
- Earnings quality
- Consecutive years of revenue growth
- Return on equity consistency
- Consecutive years of dividends held or raised
- Consecutive profitable years
- Overhead efficiency trend
- Capital spending consistency
- Operating cash flow to debt
- Free cash flow conversion
- Cash backing of earnings
- Free cash flow per share growth
- Cash return on capital
- Asset turnover
- Inventory turnover
- Receivables turnover
- Fixed asset turnover
- Revenue per employee
- Working capital turnover
- Return on capital less cost of capital
- Sustainable growth rate
- Free cash flow to revenue
- Dividend coverage
Financial health
- Debt to equity
- Debt to assets
- Net debt to EBITDA
- Current ratio
- Quick ratio
- Cash ratio
- Interest coverage
- Altman Z-score
- Piotroski F-score
- Beneish M-score
- Long-term debt to capital
- Financial leverage
- Working capital to assets
- Cash to assets
- Tangible equity ratio
- Cash conversion cycle
- Insider ownership
- Institutional ownership
- Cash runway
- Going-concern doubt in the newest report
- Auditor changes (Item 4.01), last 12 months
- Non-reliance notices (Item 4.02), last 12 months
Growth
- Revenue growth
- Revenue growth, three years
- Revenue growth, five years
- Earnings per share growth
- Earnings per share growth, three years
- Earnings per share growth, five years
- Net income growth
- Free cash flow growth
- Free cash flow growth, three years
- Book value growth, three years
- Dividend growth, three years
- Dividend growth, five years
- Operating profit growth
- Revenue trend fit
- Earnings trend fit
Risk and ownership
- Beta
- Price volatility
- Maximum drawdown
- Free cash flow to enterprise value
- Operating leverage
- Short-term share of debt
- Debt service coverage
- Capital intensity
- Capital spending share of cash flow
- Days sales outstanding
- Days inventory outstanding
- Days payables outstanding
- Operating cash flow per share
- Overhead to revenue
- Research spend to revenue
- Operating expense ratio
- Payables turnover
- Payout ratio
- Total return, one year
- Total return, three years
- New shelf registrations and prospectus supplements
- Warrants and convertibles, % of shares outstanding
- Largest customer, % of revenue
- Distance below the 52-week high
- Distance above the 52-week low
- Shares outstanding (filed)
- Share count change, last filing
- Share count change over a year
- Share count change over three years
- Net insider buying, 3 months
- Net insider buying, 12 months
- Insiders selling, 3 months
- Average daily dollar volume, 30 days
- Average daily dollar volume, 90 days
- Median daily dollar volume, 90 days
- Sessions with no trade, 90 days
- Reverse splits, 12 months