Every investing term, explained in plain English
From P/E ratio to free cash flow — understand what each number means before you put money to work.
Each article is grounded in real data — S&P 500 backtests, live screener results, and historical financials going back 30+ years.
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What Is Return on Equity (ROE)? | Meaning, Formula, and How to Use It
ROE measures how much profit a company earns for every dollar of shareholder equity — the primary quality signal Warren Buffett has used for 50 years.
What Is the Debt-to-Equity Ratio? | Meaning, Formula, and How to Use It
The debt-to-equity ratio measures how much a company relies on borrowed money versus shareholder capital — the core signal for financial leverage and solvency risk.
What Is Book Value Per Share? | Meaning, Formula, and How Investors Use It
Book value per share is the accounting value of a company's net assets divided by shares outstanding. It is the theoretical floor — what each share would be worth if the company were liquidated today. But for most modern businesses, the real value sits far above it.
What Is Market Capitalization? | Meaning, Formula, and How to Use It
Market capitalization is a company's total equity value — share price multiplied by shares outstanding. It is the most widely used measure of company size.
What Is Enterprise Value? | Meaning, Formula, and How to Use It
Enterprise value measures the total acquisition cost of a company — market cap plus net debt. It is the number acquirers use when pricing deals.
What Is the PEG Ratio? | Meaning, Formula, and How to Use It
The PEG ratio divides P/E by earnings growth. It tells you whether the price you are paying for a stock is justified by how fast it is growing — something P/E alone cannot.
What Is Price to Free Cash Flow (P/FCF)? | Meaning, Formula, and Why It Matters
Price to free cash flow compares a stock's market value to the actual cash the business generates after all operating and capital costs. It is the valuation metric most resistant to accounting manipulation.
What Is the Price to Sales Ratio (P/S)? | Meaning, Formula, and When to Use It
The price to sales ratio compares a company's market value to its annual revenue. It is most useful for valuing unprofitable or early-stage companies where earnings-based metrics do not apply.
What Is EV/EBITDA? | Meaning, Formula, and How Investors Use It
EV/EBITDA tells you what you are paying for a company's operating earnings — with debt already priced in. It is the ratio professionals reach for when P/E would give the wrong answer.
What Is the P/E Ratio? | Meaning, Formula, and How Investors Use It
The P/E ratio tells you what investors are paying for a dollar of profit. It is the most used metric in stock analysis — and the one that misleads most investors most often.