Finance Jargon
This abbreviation represents a company's operating profit
What is EBIT?
This is the 4-letter code you use to look up a company’s stock on Bloomberg or a trading app
This government agency requires the filing of a 10-K annually
What is the SEC (Securities and Exchange Commission)?
These are the two only ways to grow a business
What is gaining market share and end-market growth?
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Who is Kenichi?
This term describes the total market value of a company’s outstanding shares. Investors often use it to classify companies as small-cap, mid-cap, or large-cap
What is market capitalization (market cap)?
You can use this function in Bloomberg or Capital IQ to filter stocks based on criteria like market cap, industry, and valuation metrics
This abbreviation represents the rules and standards used to prepare U.S. financial statements
What is GAAP (Generally Accepted Accounting Principles)?
This valuation method aims to derive a company's total value based on the different segments within the business
What is sum of the parts?
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Who are Henry and Emily
If a stock pays these out regularly, some investors value the company based on the cash they receive from them.
What are dividends?
Reading this document, released quarterly, can help spark ideas by showing how a company is actually performing
What is an earnings report (or 10-Q)?
This part of the 10-K outlines the company’s plans and future goals, often providing a forward-looking statement
What is the Management's Discussion and Analysis?
In this valuation approach, you start with revenue, apply an assumed EBIT margin to get NOPAT, adjust for changes in net working capital, and work your way down to free cash flow, ultimately backing into the current market valuation
What is a reverse DCF?
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Who is Evan?
This valuation method projects future cash flows and discounts them back to present value using a required rate of return.
What is a DCF?
This classification system helps investors and analysts group companies into sectors like Technology, Healthcare, and Consumer Staples
What is GICS (Global Industry Classification Standard)?
This non-GAAP metric is often used by analysts to measure a company’s profitability before interest, taxes, depreciation, and amortization
What is EBITDA?
This valuation multiple pegs a company's earnings profile to their earnings
What is a PEG ratio?
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Who is Adam?
This finance term represents a company’s average cost of borrowing money and issuing equity
What is WACC (Weighted Average Cost of Capital)?
Before picking a stock, you often start by asking: 'What industry do I think will grow in the next 5 years?' This kind of thinking is called this.
What is a top-down approach?
This number, often found in the equity section or in footnotes, represents the total shares that would be outstanding if all convertible securities were exercised
What is diluted shares outstanding?
This momentum oscillator ranges from 0 to 100 and is used by traders to identify overbought or oversold conditions in a stock
What is RSI (Relative Strength Index)?
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Who is Jochem?