Equities

Enterprise value represents the total cost of acquiring a company — equity plus debt minus cash. The EV/EBITDA multiple provides a capital-structure-neutral valuation metric that removes the distortions of different debt levels, making it the standard for M&A analysis and cross-company comparisons.

Discounted cash flow analysis is the gold standard of intrinsic valuation in finance. Rather than relying on what the market currently pays for comparable companies, a DCF model estimates what a business is actually worth by projecting its future cash flows and discounting them back to present value. The underlying principle is the same time-value-of-money […]

The expense ratio is the annual fee a fund charges as a percentage of assets under management. Learn what it includes, what it excludes, how fees compound over decades, and what constitutes a good expense ratio for ETFs and mutual funds.

Free cash flow (FCF) measures the cash a company generates after funding operations and capital expenditures. Learn the FCFF and FCFE formulas, how to calculate FCF from financial statements, and how to use FCF yield and FCF margin to evaluate business quality.

Profit margins measure what percentage of revenue a company retains as profit at each stage of the income statement. This guide covers the three key margins — gross, operating, and net — with formulas, industry benchmarks, and real-world examples.

Learn what index funds are, how they work, and why passive investing outperforms most active strategies. Covers SPIVA evidence, fee compounding, fund selection, and common mistakes.

Return on assets (ROA) measures how efficiently a company converts its total asset base into profit. This guide covers the ROA formula, industry benchmarks for asset-heavy vs asset-light businesses, the ROA vs ROE comparison, and common analytical pitfalls.

Return on invested capital (ROIC) measures how much after-tax operating profit a company generates relative to the total capital invested in its operations. When ROIC exceeds WACC, the company creates economic value.

A stock market index tracks the performance of a group of stocks, serving as a benchmark for portfolio evaluation, the basis for index funds and ETFs, and an economic barometer. This guide covers weighting methods, major U.S. and international indexes, reconstitution, and why index methodology matters for investors.

Short selling lets investors profit from falling stock prices by selling borrowed shares. Learn the mechanics, margin requirements, short squeeze risk, and how shorting compares to buying put options.