Fundamental Analysis & Valuation
70 terms · page 3 of 3
Operating Margin
Operating profit as a percentage of revenue, showing what the core business keeps before interest and tax.
Fundamental Analysis & ValuationPEG Ratio
The price-to-earnings ratio divided by the expected annual earnings growth rate, used to judge whether growth justifies the multiple.
Fundamental Analysis & ValuationPiotroski F-Score
A nine-point checklist of year-on-year improvements in profitability, leverage and efficiency, scoring financial strength from 0 to 9.
Fundamental Analysis & ValuationPrice-to-Book Ratio
The market price of a share divided by its book value per share.
Fundamental Analysis & ValuationPrice-to-Cash-Flow Ratio
Market capitalisation divided by operating cash flow, valuing the company against cash generated rather than accounting profit.
Fundamental Analysis & ValuationPrice-to-Earnings Ratio
The price of one share divided by the earnings attributable to it, showing how many rupees are paid per rupee of annual profit.
Fundamental Analysis & ValuationPrice-to-Sales Ratio
Market capitalisation divided by annual revenue, showing how much is paid per rupee of sales.
Fundamental Analysis & ValuationPricing Power
The ability to raise prices without losing enough volume to reduce profit.
Fundamental Analysis & ValuationQuality Investing
An approach that prioritises businesses with durable high returns on capital, strong balance sheets and consistent cash generation.
Fundamental Analysis & ValuationQuick Ratio
Current assets excluding inventory, divided by current liabilities — a stricter test of short-term solvency.
Fundamental Analysis & ValuationRelative Valuation
Valuing a company by comparing its multiples with those of similar companies or with its own history.
Fundamental Analysis & ValuationReturn on Assets
Net profit as a percentage of total assets, measuring how much profit the asset base generates regardless of funding.
Fundamental Analysis & ValuationReturn on Capital Employed
Operating profit as a percentage of the total capital, both equity and debt, used to generate it.
Fundamental Analysis & ValuationReturn on Equity
Net profit expressed as a percentage of shareholders' equity, measuring what the business earns on the owners' capital.
Fundamental Analysis & ValuationReturn on Invested Capital
After-tax operating profit as a percentage of the capital actually invested in operations, excluding surplus cash.
Fundamental Analysis & ValuationRevenue Growth
The rate at which a company's sales increase from one period to the next.
Fundamental Analysis & ValuationShares Outstanding
The total number of a company's shares currently held by all shareholders, including promoters and institutions.
Fundamental Analysis & ValuationSum-of-the-Parts Valuation
Valuing a diversified company by valuing each business separately and adding the results, less net debt and holding-company costs.
Fundamental Analysis & ValuationTerminal Value
The estimated value of a business beyond the explicit forecast period in a discounted cash flow model.
Fundamental Analysis & ValuationTrailing Price-to-Earnings
The price-to-earnings ratio computed using earnings actually reported over the last twelve months.
Fundamental Analysis & ValuationValue Trap
A share that looks cheap on backward-looking multiples but is cheap because its business is deteriorating.
Fundamental Analysis & ValuationWeighted Average Cost of Capital
The blended after-tax cost of a company's debt and equity funding, weighted by their market values.