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Terms starting with E

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Corporate Actions, Dividends & Governance

E-Voting

Electronic voting on shareholder resolutions, mandatory for listed companies in India.

Test: the company provides a remote electronic voting facility open for a stated period before the meeting qualitative
Fundamental Analysis & Valuation

Earnings Growth

The rate at which a company's profit increases from one period to the next.

Earnings Growth = (Current Period Earnings - Prior Period Earnings) / Prior Period Earnings x 100 %
Fundamental Analysis & Valuation

Earnings per Share

Net profit attributable to equity shareholders divided by the weighted average number of shares outstanding.

EPS = Profit Attributable to Equity Shareholders / Weighted Average Shares Outstanding
Fundamental Analysis & Valuation

Earnings Quality

The extent to which reported profit is backed by cash, is repeatable, and reflects the underlying business rather than accounting choices.

Test: cumulative operating cash flow tracks cumulative net profit over several years, with few exceptional items and stable accounting policies qualitative
Fundamental Analysis & Valuation

Earnings Yield

Earnings per share expressed as a percentage of the share price — the inverse of the price-to-earnings ratio.

Earnings Yield = Earnings per Share / Market Price per Share x 100 = 1 / P/E x 100 %
Financial Statements & Accounting

EBITDA

Earnings before interest, tax, depreciation and amortisation — a measure of operating profit that ignores capital structure and asset…

EBITDA = Revenue - Operating Expenses (excluding depreciation and amortisation) ₹ crore
Fundamental Analysis & Valuation

EBITDA Margin

EBITDA as a percentage of revenue, measuring operating profitability before depreciation, interest and tax.

EBITDA Margin = EBITDA / Revenue x 100 %
Fundamental Analysis & Valuation

Economic Value Added

The profit a business earns above the full cost of the capital employed to produce it.

EVA = Net Operating Profit After Tax - (Invested Capital x Weighted Average Cost of Capital) ₹ crore
Fundamental Analysis & Valuation

Effective Tax Rate

The tax charge in the accounts expressed as a percentage of profit before tax.

Effective Tax Rate = Total Tax Expense / Profit Before Tax x 100 %
Risk & Portfolio Management

Efficient Frontier

The set of portfolios offering the highest expected return for each level of risk.

Test: no other portfolio offers a higher expected return at the same standard deviation, or the same return at a lower one qualitative
Technical Analysis & Chart Patterns

Elliott Wave Theory

A framework proposing that price moves in repeating sequences of five waves in the direction of the trend and three against it.

Structure: impulse waves 1-2-3-4-5 in the trend direction, followed by corrective waves A-B-C, with each wave subdividing into the same structure qualitative
Funds, ETFs & Index Investing

ELSS

An equity-linked savings scheme: a diversified equity fund with a three-year lock-in that qualifies for a tax deduction.

Test: minimum 80% in equity, three-year lock-in per instalment, and eligibility under Section 80C of the Income Tax Act qualitative
Risk & Portfolio Management

Emergency Fund

Money held in safe, immediately accessible instruments to cover unexpected expenses or loss of income.

Target Emergency Fund = Monthly Essential Expenses x Number of Months of Cover Required
Corporate Actions, Dividends & Governance

Employee Stock Option

A right granted to an employee to buy company shares at a preset price after a vesting period.

Perquisite Value on Exercise = (Fair Market Value on Exercise Date - Exercise Price) x Number of Options Exercised
Market Psychology & Behavioural Finance

Endowment Effect

The tendency to value something more highly simply because one owns it.

Test: the price demanded to sell an item exceeds the price the same person would pay to buy it qualitative
Fundamental Analysis & Valuation

Enterprise Value

The value of the whole business regardless of how it is financed, equal to market capitalisation plus net debt.

Enterprise Value = Market Capitalisation + Total Debt - Cash and Cash Equivalents + Non-Controlling Interests ₹ crore
Indicators & Oscillators

Envelope Channel

Bands drawn a fixed percentage above and below a moving average.

Upper Envelope = Moving Average x (1 + Percentage); Lower Envelope = Moving Average x (1 - Percentage) %
Funds, ETFs & Index Investing

Equal-Weighted Index

An index in which every constituent carries the same weight regardless of company size.

Weight of each Constituent = 1 / Number of Constituents %
Market Basics & Instruments

Equity

The residual ownership interest in a company: what would remain for its owners once every liability had been settled.

Equity = Total Assets - Total Liabilities ₹ crore
Funds, ETFs & Index Investing

Equity Fund

A mutual fund investing at least 65% of its assets in Indian equity and equity-related instruments.

Test: minimum 65% allocation to domestic equity, which also determines the scheme's tax treatment qualitative
Risk & Portfolio Management

Equity Risk Premium

The additional return investors require for holding equities rather than the risk-free asset.

Equity Risk Premium = Expected Market Return - Risk-Free Rate %
Market Basics & Instruments

Equity Share

The ordinary ownership share of a company, carrying voting rights and a claim on profits only after every other claimant has been paid.

Payout rank: secured creditors, then unsecured creditors, then preference shares, then equity shares qualitative
Funds, ETFs & Index Investing

ETF Premium/Discount

The gap between an ETF's market price and the value of its underlying holdings.

Premium or Discount % = (Market Price - iNAV) / iNAV x 100 %
Market Psychology & Behavioural Finance

Euphoria

A state of widespread optimism in which risk is discounted and price rises are treated as normal.

Test: rising participation, leverage and new issuance combine with a narrative explaining why traditional valuation no longer applies qualitative