Financial Metrics Cheat Sheet
A plain-English cheat sheet for common stock research metrics.
Market cap
Market cap is the market value of a company's equity. It helps frame company size but does not explain financial health by itself.
Revenue growth
Revenue growth shows sales expansion. Read it with margins and cash flow to understand the quality of growth.
EPS
Earnings per share shows profit attributed to each share. It can be affected by net income, share count, and one-time items.
Free cash flow
Free cash flow is cash left after operating needs and capital spending. It helps show whether earnings are turning into cash.
Operating margin and gross margin
Gross margin focuses on direct costs. Operating margin includes operating expenses and shows core operating profitability.
Debt-to-equity and return on equity
Debt-to-equity helps frame leverage. Return on equity compares profit with shareholders' equity, but it should be read with debt.
P/E ratio and net income
The P/E ratio compares price with earnings. Net income is accounting profit after expenses, interest, taxes, and other items.
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