Fundamental Analysis & Valuation
70 terms · page 1 of 3
Altman Z-Score
A weighted combination of five financial ratios that estimates a company's likelihood of financial distress.
Fundamental Analysis & ValuationAsset Turnover Ratio
Revenue divided by total assets, measuring how much sales the asset base generates.
Fundamental Analysis & ValuationBook Value per Share
Shareholders' equity divided by the number of shares outstanding — the accounting value attaching to one share.
Fundamental Analysis & ValuationCapital Allocation
Management's decisions about where to deploy the cash a business generates: reinvestment, acquisitions, debt repayment, dividends or…
Fundamental Analysis & ValuationCapital Asset Pricing Model
A model that estimates the return required on an asset as the risk-free rate plus a premium proportional to its market risk.
Fundamental Analysis & ValuationCash Conversion Cycle
The number of days between paying for inputs and collecting cash from customers.
Fundamental Analysis & ValuationComparable Company Analysis
The selection and adjustment of a peer group whose multiples are used to value a target company.
Fundamental Analysis & ValuationCompound Annual Growth Rate
The constant annual rate at which a value would have had to grow to move from its starting figure to its ending figure.
Fundamental Analysis & ValuationConsensus Estimate
The average of analysts' forecasts for a company's future earnings, revenue or other metric.
Fundamental Analysis & ValuationCost of Equity
The return shareholders require for bearing the risk of owning a company's shares.
Fundamental Analysis & ValuationCurrent Ratio
Current assets divided by current liabilities, measuring whether short-term obligations are covered by short-term assets.
Fundamental Analysis & ValuationDebt Service Coverage Ratio
Cash available for debt service divided by the total of interest and principal due in the period.
Fundamental Analysis & ValuationDebt-to-Equity Ratio
Total borrowings divided by shareholders' equity, measuring how much of the business is funded by lenders relative to owners.
Fundamental Analysis & ValuationDebtor Turnover Ratio
Revenue divided by average trade receivables, showing how many times a year credit sales are collected.
Fundamental Analysis & ValuationDiluted Earnings per Share
Earnings per share recalculated as if every instrument convertible into equity had already been converted.
Fundamental Analysis & ValuationDilution
The reduction in existing shareholders' proportional ownership and per-share claims caused by issuing new shares.
Fundamental Analysis & ValuationDiscounted Cash Flow
A valuation method that estimates a business's worth as the present value of the cash it is expected to generate.
Fundamental Analysis & ValuationDividend Discount Model
A valuation method that values a share as the present value of all the dividends it is expected to pay.
Fundamental Analysis & ValuationDuPont Analysis
A decomposition of return on equity into profit margin, asset turnover and financial leverage, showing what drives the return.
Fundamental Analysis & ValuationEarnings Growth
The rate at which a company's profit increases from one period to the next.
Fundamental Analysis & ValuationEarnings per Share
Net profit attributable to equity shareholders divided by the weighted average number of shares outstanding.
Fundamental Analysis & ValuationEarnings Quality
The extent to which reported profit is backed by cash, is repeatable, and reflects the underlying business rather than accounting choices.
Fundamental Analysis & ValuationEarnings Yield
Earnings per share expressed as a percentage of the share price — the inverse of the price-to-earnings ratio.
Fundamental Analysis & ValuationEBITDA Margin
EBITDA as a percentage of revenue, measuring operating profitability before depreciation, interest and tax.