Stock Market Glossary

The metrics behind every stock, explained in plain English. Each term includes a clear definition, the formula, a worked example, and what counts as a good value. New to investing? Start with the P/E ratio and dividend yield.

Valuation

P/E Ratio

Price-to-Earnings Ratio

How much investors pay for each $1 of a company's annual earnings.

P/B Ratio

Price-to-Book Ratio

Share price compared to the company's net asset (book) value per share.

PEG Ratio

Price/Earnings-to-Growth Ratio

The P/E ratio adjusted for a company's earnings growth rate.

P/S Ratio

Price-to-Sales Ratio

A company's market cap compared to its annual revenue.

EV/EBITDA

Enterprise Value to EBITDA

A valuation multiple that accounts for debt and cash, comparing total company value to core operating profit.

Profitability

EPS

Earnings Per Share

A company's net profit divided by its number of shares.

ROE

Return on Equity

How much profit a company generates from shareholders' equity.

Dividends

Dividend Yield

A stock's annual dividend as a percentage of its share price.

Size

Market Cap

Market Capitalization

The total value of a company's shares: price times share count.

Risk

Beta

How much a stock moves relative to the overall market.

Filings

10-K

Annual Report (Form 10-K)

A public company's comprehensive annual report filed with the SEC.

10-Q

Quarterly Report (Form 10-Q)

A public company's quarterly financial report filed with the SEC.

8-K

Current Report (Form 8-K)

The filing companies use to announce major events between quarterly reports.

Form 4

Insider Trading Report (Form 4)

The filing that discloses when company insiders buy or sell their own stock.

SEC EDGAR

SEC EDGAR Database

The SEC's free public database of every filing US public companies submit.

Understanding these ratios turns a wall of numbers into a story about a business. See them live on any stock analysis page, or filter the whole market by them with the stock screener.