Market Calculators
Dividend Payout Ratio – measures the percentage of earnings paid to shareholders as dividends, calculated by dividing total dividends by net income. A higher ratio indicates more earnings returned to shareholders.
Dividend Discount Model – values a company’s stock by estimating future dividend payments and discounting them back to present value. It is based on the premise that a stock’s worth is the sum of its future cash flows from dividends.
Earnings per Share – measures a company’s profitability by dividing net income by the number of outstanding shares. A higher EPS indicates greater profitability on a per-share basis.
Price Earnings Ratio – compares a company’s current share price to its earnings per share (EPS). It indicates how much investors are willing to pay for a dollar of earnings. A higher P/E ratio may suggest higher growth expectations.
Dividend Yield – measures the annual dividend income per share as a percentage of the stock’s current price. It is calculated by dividing the annual dividends by the stock price. A higher dividend yield indicates a better return on investment from dividends.
RSI – a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100 and is typically used to identify overbought or oversold conditions in a stock, with values above 70 indicating overbought and below 30 indicating oversold.
Sharpe Ratio – measures the risk-adjusted return of an investment by comparing its excess return to its volatility. It is calculated by subtracting the risk-free rate from the investment’s return and dividing by the standard deviation of the investment’s returns. A higher Sharpe Ratio indicates better risk-adjusted performance.
Treynor Ratio – measures the risk-adjusted return of an investment by comparing its excess return to systematic risk (beta). It is calculated by subtracting the risk-free rate from the investment’s return and dividing by its beta. A higher Treynor Ratio indicates better performance relative to market risk.
Maximum Drawdown – measures the largest peak-to-trough decline in the value of an investment or portfolio over a specified period. It indicates the worst potential loss an investor could face, helping assess risk. A smaller maximum drawdown suggests lower volatility and risk.
Price/Sales – compares a company’s stock price to its revenue per share. It is calculated by dividing the market capitalization by total sales. A lower P/S ratio may indicate that a stock is undervalued relative to its sales.
Price/Book Value – compares a company’s market price per share to its book value per share. It is calculated by dividing the stock price by the book value. A P/B ratio below 1 may suggest that the stock is undervalued relative to its net assets.
Capital Gains Yield – measures the price appreciation of an investment over a specific period, expressed as a percentage of the original investment. It is calculated by dividing the change in price by the original price. A higher capital gains yield indicates better performance in terms of price appreciation.
Holding Period Return – the total return on an investment over the period it is held, including capital gains and any income generated. It is calculated by dividing the total return (ending value minus initial value) by the initial investment. A higher HPR indicates better overall performance.
Cost of Equity – the return that investors require for holding a company’s equity, reflecting the risk associated with the investment. It is often estimated using models like the Capital Asset Pricing Model (CAPM) and is used in financial analysis to evaluate investment projects and determine the required rate of return.
Enterprise Value – measures a company’s total value, including market capitalization, debt, and minority interests, minus cash and cash equivalents. It provides a comprehensive view of a firm’s worth, often used in mergers and acquisitions and for comparing companies.
Graham Number – a formula used to determine the maximum fair value of a stock based on its earnings per share (EPS) and book value per share. It is calculated as the square root of (22.5 times the EPS times the book value per share). This number provides a conservative estimate for value investors, helping identify undervalued stocks.
Graham Formula – estimates the intrinsic value of a stock based on its earnings per share (EPS) and growth rate. Developed by Benjamin Graham, it helps investors assess fair value by considering both current earnings and future growth potential. This method is commonly used by value investors to identify potentially undervalued stocks.
Liquidity Calculators
Current Ratio – measures a company’s ability to meet its short-term liabilities with its short-term assets. It is calculated by dividing total current assets by total current liabilities. A higher current ratio indicates better liquidity and financial health.
Quick Ratio – measures a company’s ability to meet its short-term liabilities with its most liquid assets, excluding inventory. It is calculated by dividing current assets minus inventory by current liabilities. A higher quick ratio indicates better liquidity and financial stability.
Working Capital – represents the difference between a company’s current assets and current liabilities. It measures a company’s short-term financial health and its ability to cover short-term obligations. Positive working capital indicates good liquidity, while negative working capital may signal financial trouble.
Cash Ratio – measures a company’s ability to pay off its current liabilities using only its cash and cash equivalents. It is calculated by dividing cash and cash equivalents by current liabilities. A higher cash ratio indicates stronger liquidity and a greater ability to meet short-term obligations.
Net Working Capital – the difference between a company’s current assets and current liabilities, indicating the amount of liquidity available for daily operations. It helps assess a company’s short-term financial health and operational efficiency. Positive net working capital suggests a company can easily cover its short-term debts.
Days of Sales Outstanding – measures the average number of days it takes a company to collect payment after a sale. It is calculated by dividing accounts receivable by average daily sales. A lower DSO indicates quicker collections, reflecting better cash flow management.
Days of Payables Outstanding – the average number of days a company takes to pay its suppliers after receiving goods or services. It is calculated by dividing accounts payable by average daily purchases. A higher DPO indicates that a company is taking longer to pay its bills, which can improve cash flow but may affect supplier relationships.
Profitability
Profit Margin – the percentage of revenue that remains as profit after all expenses are deducted. It is calculated by dividing net income by total revenue. A higher profit margin indicates greater efficiency in converting sales into actual profit.
Gross Profit Margin – measures the percentage of revenue that exceeds the cost of goods sold (COGS). It is calculated by dividing gross profit by total revenue. A higher gross profit margin indicates better efficiency in production and pricing.
Return on Assets – a company’s profitability relative to its total assets. It is calculated by dividing net income by total assets. A higher ROA indicates more efficient use of assets to generate profit.
Return on Equity – a company’s profitability in relation to shareholders’ equity. It is calculated by dividing net income by average shareholders’ equity. A higher ROE indicates more effective management in generating profit from shareholders’ investments.
Return on Net Assets – a company’s profitability relative to its net assets, which are total assets minus total liabilities. It is calculated by dividing net income by net assets. A higher RONA indicates more efficient use of net assets to generate profit.
Return on Sales – measures a company’s operating efficiency by calculating the percentage of revenue that translates into operating profit. It is calculated by dividing operating income by total revenue. A higher ROS indicates better profitability from sales.
Return on Capital Employed – measures a company’s profitability relative to its total capital employed, which includes equity and debt. It is calculated by dividing operating profit by capital employed. A higher ROCE indicates more efficient use of capital to generate profits.
EBITDA – stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company’s operating performance by focusing on earnings generated from core operations, excluding non-operational factors. It is often used as an indicator of financial health and profitability.
EBIT – stands for Earnings Before Interest and Taxes. It measures a company’s profitability from its core operations by excluding interest and tax expenses. EBIT is often used to assess operational performance and is a key figure in calculating metrics like the interest coverage ratio.
Operating Margin – the percentage of revenue that remains after covering operating expenses, excluding interest and taxes. It is calculated by dividing operating income by total revenue. A higher operating margin indicates better efficiency in managing operating costs.
Solvency
Debt Ratio – the proportion of a company’s total assets that are financed by debt. It is calculated by dividing total liabilities by total assets. A higher debt ratio indicates greater reliance on debt financing, which can imply higher financial risk.
Debt Equity Ratio – compares a company’s total liabilities to its shareholders’ equity. It is calculated by dividing total debt by total equity. A higher debt equity ratio indicates greater reliance on debt financing relative to equity, suggesting higher financial risk.
Debt Coverage Ratio – a company’s ability to service its debt obligations with its operating income. It is calculated by dividing net operating income by total debt service (interest and principal repayments). A higher ratio indicates better capacity to cover debt payments, suggesting lower financial risk.
Equity Multiplier – measures a company’s financial leverage by comparing total assets to total equity. It is calculated by dividing total assets by total equity. A higher equity multiplier indicates greater use of debt to finance assets, suggesting higher financial risk.
Debt to Income Ratio – assesses a company’s ability to cover its debt obligations with its operating income. It is calculated by dividing total debt by operating income. A lower ratio indicates a healthier balance between debt and income, suggesting better financial stability and less risk.
Interest Coverage Ratio – a company’s ability to pay interest on its outstanding debt using its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses. A higher ratio indicates greater ability to meet interest payments, suggesting lower financial risk.
Fixed Charge Coverage Ratio – a company’s ability to cover fixed financial obligations, such as interest and lease payments, with its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) plus fixed charges by total fixed charges. A higher ratio indicates better financial stability and the ability to meet fixed obligations.
Altman Z-Score – a formula used to predict a company’s likelihood of bankruptcy within two years. It combines five financial ratios, including profitability, leverage, liquidity, and activity, to produce a single score. A Z-Score above 3 indicates a low risk of bankruptcy, while a score below 1.8 suggests a high risk.
Times Interest Earned Ratio – a company’s ability to meet its interest obligations with its earnings before interest and taxes (EBIT). It is calculated by dividing EBIT by interest expenses. A higher ratio indicates a greater ability to cover interest payments, suggesting lower financial risk.
DSCR (Debt Service Coverage Ratio) – a company’s ability to cover its debt obligations with its operating income. It is calculated by dividing net operating income by total debt service (interest and principal repayments). A higher DSCR indicates better financial health and capacity to meet debt obligations.
LTV (Loan to Value) – the ratio of a loan to the appraised value of an asset, typically used in real estate financing. It is calculated by dividing the loan amount by the property’s appraised value. A higher LTV indicates higher risk for lenders, as it suggests less equity in the property.
Total Asset Turnover – how efficiently a company uses its assets to generate sales. It is calculated by dividing total revenue by total assets. A higher ratio indicates better efficiency in utilizing assets to produce revenue.
Fixed Asset Turnover – how efficiently a company uses its fixed assets to generate sales. It is calculated by dividing total revenue by net fixed assets. A higher ratio indicates better utilization of fixed assets, such as property, plant, and equipment, to produce revenue.
Days in Inventory – the average number of days a company holds inventory before selling it. It is calculated by dividing the average inventory by the cost of goods sold (COGS) and multiplying by 365. A lower number of days indicates faster inventory turnover and efficient inventory management.
Average Collection Period – the average number of days it takes a company to collect payment from its customers after a sale. It is calculated by dividing accounts receivable by average daily sales. A shorter collection period indicates efficient credit and collection practices.
Debtor Days – the average number of days it takes for a company to collect payment from its customers after a sale. It is calculated by dividing accounts receivable by average daily sales. Fewer debtor days indicate better efficiency in collecting receivables.
Receivables Turnover Ratio – how effectively a company collects its accounts receivable. It is calculated by dividing net credit sales by average accounts receivable. A higher ratio indicates more efficient collection of receivables, reflecting strong credit management.
Ratios
ROI (Return on Investment) – the profitability of an investment relative to its cost. It is calculated by dividing the net profit from the investment by the initial cost, usually expressed as a percentage. A higher ROI indicates a more profitable investment.
ROIC (Return on Investment Capital) – the efficiency of a company in generating returns from its capital investments. It is calculated by dividing net operating profit after tax (NOPAT) by the total invested capital. A higher ROIC indicates better performance and effective use of capital.
Book Value per Share – the value of a company’s equity on a per-share basis. It is calculated by dividing total shareholders’ equity by the number of outstanding shares. BVPS provides insight into the intrinsic value of a stock, helping investors assess whether it is undervalued or overvalued.
Retention Ratio – the percentage of net income that a company retains for reinvestment rather than paying out as dividends. It is calculated by dividing retained earnings by net income. A higher retention ratio indicates a greater focus on reinvesting profits to fuel growth.
Capital Employed – the total amount of capital that a company uses for its operations. It is typically calculated as total assets minus current liabilities or as the sum of equity and long-term debt. Capital employed helps assess a company’s efficiency and profitability in using its capital to generate returns.
Margin of Safety – the difference between the intrinsic value of an investment and its market price. It represents a buffer for investors, providing protection against errors in analysis or market volatility. A larger margin of safety indicates a lower risk of loss in investment.
WACC (Weighted Average Cost of Capital) – a company’s overall cost of capital by averaging the costs of equity and debt, weighted by their proportion in the capital structure. It reflects the average rate that a company is expected to pay to finance its assets and is used in investment decisions and valuation.