Equities

Learn how the price-to-book ratio measures what investors pay per dollar of net assets, why it is the primary valuation metric for banks, and how P/B connects to ROE.

The price-to-sales ratio (P/S) measures how much investors pay for each dollar of a companys annual revenue, making it the primary valuation metric for unprofitable high-growth companies where the P/E ratio is undefined.

Intrinsic value is the estimated true worth of a stock based on fundamental analysis. Learn how to calculate intrinsic value using DCF, DDM, and relative valuation methods, and how to apply the margin of safety principle to make better investment decisions.

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.