Equities

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.

Return on equity is the single most important profitability metric for equity investors. It measures how much profit a company generates with the money shareholders have invested — and that one number encodes management effectiveness, capital discipline, and competitive positioning. Warren Buffett has famously used ROE as a quality screen — his well-known heuristic of […]

Market capitalization measures a company’s total equity value by multiplying its stock price by shares outstanding. Learn how market cap classifies stocks by size, how it differs from enterprise value, and why it matters for index construction and investment strategy.

The debt-to-equity ratio measures how much debt a company carries relative to shareholders equity. Learn the D/E formula, net D/E variant, industry benchmarks, and how to interpret leverage across sectors.

Earnings per share is the most widely cited measure of a company’s profitability on a per-share basis. When a company reports quarterly results, EPS is the number that moves stock prices — beating or missing analyst consensus by even a few cents can trigger significant price swings. Understanding how EPS is calculated, what distinguishes high-quality […]

Mutual funds pool money from many investors into diversified portfolios of stocks, bonds, or other securities. Learn how NAV and forward pricing work, compare share classes and fee structures, understand open-end vs closed-end funds, and discover how to select the right mutual fund for your portfolio.

Exchange-traded funds (ETFs) combine mutual fund diversification with intraday stock trading. Learn how the creation/redemption mechanism works, why ETFs are tax efficient, types of ETFs, and how to evaluate total cost of ownership.

The price-to-earnings ratio (P/E) measures how much investors pay for each dollar of a company’s earnings, serving as the most widely used equity valuation metric in finance.