Glossary
Learn key stock market terms and concepts. Browse 93 investment definitions.
93 terms found
A
B
Beta
Risk ManagementA measure of a stock's volatility relative to the market.
Bid Price
TradingThe highest price a buyer will pay.
Bid-Ask Spread
TradingThe difference between bid and ask prices.
Blue-Chip Stock
AnalysisStock in a large, reputable, stable company.
Brokerage Account
TradingAn account for buying and selling securities.
C
Capital Gains
Stock BasicsProfit from selling an investment at a higher price than you paid.
Cash Conversion Cycle (CCC)
FundamentalsDays to convert working capital investments back to cash.
Cash Ratio
FundamentalsCash and equivalents divided by current liabilities.
Commission
TradingA fee charged per trade by a broker.
Common Stock
InstrumentsStandard stock with voting rights.
Cost of Debt
AnalysisThe effective interest rate a company pays on its debt.
Cost of Equity
AnalysisThe return required by equity investors.
Current Ratio
FundamentalsCurrent assets divided by current liabilities.
D
Days Inventory Outstanding (DIO)
FundamentalsAverage days to sell inventory.
Days Payable Outstanding (DPO)
FundamentalsAverage days to pay suppliers.
Days Sales Outstanding (DSO)
FundamentalsAverage days to collect receivables.
Debt-to-EBITDA
FundamentalsTotal debt divided by EBITDA.
Debt-to-Equity Ratio (D/E)
FundamentalsTotal debt divided by shareholders' equity.
Discounted Cash Flow (DCF)
AnalysisValuation method based on projected future cash flows.
Diversification
Risk ManagementSpreading investments to reduce risk.
Dividend
Stock BasicsA payment of company profits to shareholders.
Dividend Coverage Ratio
FundamentalsEPS divided by dividend per share.
Dividend Payout Ratio
FundamentalsDividends paid divided by net income.
Dividend Yield
FundamentalsAnnual dividends divided by stock price, shown as a percentage.
Dollar-Cost Averaging
Risk ManagementInvesting fixed amounts regularly regardless of price.
DuPont Analysis
FundamentalsFramework decomposing ROE into profitability, efficiency, and leverage.
E
Earnings Per Share (EPS)
FundamentalsNet income divided by shares outstanding.
Earnings Yield
FundamentalsEPS divided by stock price, expressed as percentage.
EBITDA Margin
FundamentalsEBITDA divided by revenue, as a percentage.
Efficiency Ratio
FundamentalsMeasures how effectively a company uses resources.
Enterprise Value (EV)
FundamentalsTotal company value including debt minus cash.
EPS Growth Rate
FundamentalsPercentage change in earnings per share.
Equity
Stock BasicsOwnership interest in a company; stocks.
Equity Risk Premium
AnalysisThe extra return demanded for holding stocks over risk-free bonds.
EV/EBITDA
FundamentalsEnterprise value divided by EBITDA.
Exchange-Traded Fund (ETF)
InstrumentsA fund that trades on exchanges like a stock.
Expense Ratio
FundamentalsAnnual fee charged by a fund as a percentage of assets.
F
G
I
Index Fund
InstrumentsA fund that tracks a market index.
Initial Public Offering (IPO)
Stock BasicsA company's first sale of stock to the public.
Institutional Investor
TradingAn organization that invests money on behalf of others.
Interest Coverage Ratio
FundamentalsEBIT divided by interest expense.
Intrinsic Value
AnalysisThe calculated 'true' value of an asset.
Inventory Turnover
FundamentalsCost of goods sold divided by average inventory.
L
M
N
NASDAQ
TradingA major electronic stock exchange focused on tech.
Net Profit Margin
FundamentalsNet income divided by revenue, as a percentage.
NOPAT
FundamentalsOperating profit minus taxes on that profit.
NYSE
TradingThe world's largest stock exchange by market cap.
P
PEG Ratio
FundamentalsP/E ratio divided by expected earnings growth rate.
Portfolio
Stock BasicsYour complete collection of investments.
Preferred Stock
InstrumentsStock with priority dividends but limited voting rights.
Price-to-Book Ratio (P/B)
FundamentalsStock price divided by book value per share.
Price-to-Earnings Ratio (P/E)
FundamentalsStock price divided by earnings per share.
Price-to-Sales Ratio (P/S)
FundamentalsMarket cap divided by annual revenue.
R
Relative Valuation
AnalysisValuing a company by comparing it to similar companies.
Retail Investor
TradingAn individual investor trading for personal accounts.
Return on Assets (ROA)
FundamentalsNet income divided by total assets.
Return on Equity (ROE)
FundamentalsNet income divided by shareholders' equity.
Return on Invested Capital (ROIC)
FundamentalsAfter-tax operating profit divided by invested capital.
Revenue Growth Rate
FundamentalsPercentage change in revenue from prior period.
Risk Tolerance
Risk ManagementYour capacity to handle investment losses.
Risk-Free Rate
AnalysisThe return on a zero-risk investment (e.g., US Treasuries).
S
Share
Stock BasicsA single unit of stock ownership.
Shareholder
Stock BasicsA person or entity that owns shares of stock.
Stock
Stock BasicsA security representing ownership in a corporation.
Stock Exchange
TradingA marketplace for buying and selling securities.
Stop Order
TradingAn order that triggers at a specific price to limit losses.
Stop-Limit Order
TradingA stop order that becomes a limit order when triggered.
Sustainable Growth Rate
FundamentalsMaximum growth rate achievable without external funding.
T
Terminal Value
AnalysisThe value of a company beyond the forecast period.
Ticker Symbol
TradingA unique abbreviation identifying a stock on an exchange.
Total Return
FundamentalsCombined return from dividends and capital gains.
Trade Settlement
TradingThe final transfer of securities and payment after a trade.
Trading Volume
TradingThe number of shares traded in a given period.