Stock metrics, with the formulas
The numbers a quote page and a screener show you, grouped the way you use them. Each page gives the formula, works one example through, and says where the number misleads.
Valuation
What the market is paying for each dollar of earnings, sales, book value or cash flow.
| Metric | Formula |
|---|---|
| Enterprise Value/EBITDA A multiple that values the entire business, debt included and cash netted off, against a rough measure of operating profit before financing costs and non-cash charges. | Enterprise value ÷ earnings before interest, taxes, depreciation and amortization over the last 12 months |
| P/E ratio How many dollars buyers are paying for each dollar of a company's yearly earnings per share, using either reported profit or analyst forecasts. | Share price ÷ earnings per share over a stated 12-month period |
| PEG ratio A P/E ratio divided by the yearly growth expected in earnings per share, used to judge whether a high multiple is being paid for by fast growth. | P/E ratio ÷ expected annual EPS growth rate, with growth entered as a whole-number percent |
| Price/Book (MRQ) The market value of a company's stock set against the net worth on its balance sheet, where net worth is total assets minus total liabilities at accounting values. | Market capitalization ÷ shareholders' equity, or share price ÷ book value per share |
| Price/Sales (TTM) The price the market puts on each dollar of a company's yearly revenue, a valuation that still works when there is no profit to divide into. | Market capitalization ÷ revenue over the trailing 12 months, or share price ÷ sales per share |
Profitability
How much of each sales dollar survives as profit, and how well capital earns.
| Metric | Formula |
|---|---|
| EPS (TTM) The part of a company's profit for a period that is attributable to each common share, reported as basic, diluted and often an adjusted figure chosen by management. | (Net income − preferred dividends) ÷ weighted average common shares outstanding |
| Gross, operating and net margin Three percentages showing how much of each dollar of revenue is left after direct costs, after all operating costs, and finally after interest, taxes and everything else. | Gross: (revenue − cost of goods sold) ÷ revenue. Operating: operating income ÷ revenue. Net: net income ÷ revenue |
| Return on equity (TTM) A year of a company's profit measured against the shareholders' equity on its balance sheet, showing how much the owners' capital earned. | Net income ÷ average shareholders' equity over the same period |
| Return on invested capital The after-tax operating profit a business earns on all the money lenders and shareholders have put into it, with idle cash taken out of the capital base. | NOPAT ÷ invested capital, with NOPAT = operating income × (1 − tax rate) and invested capital = debt + equity − cash |
Balance sheet and cash
Debt, liquidity and the cash a business actually produces.
| Metric | Formula |
|---|---|
| Cash conversion cycle The number of days between a company paying its suppliers for goods and collecting cash from customers for selling them. | Days inventory outstanding + days sales outstanding − days payables outstanding |
| Current ratio and quick ratio Two tests of whether a company's short-term assets cover the bills due within a year, with the quick ratio leaving out inventory and other assets that are slow to become cash. | Current: current assets ÷ current liabilities. Quick: (cash + marketable securities + receivables) ÷ current liabilities |
| Free cash flow The cash a company's operations generated over a period after paying for capital spending, which is what remains for dividends, buybacks, debt repayment or acquisitions. | Cash from operations minus capital expenditures; FCF yield is FCF ÷ market capitalization |
| Interest coverage ratio How many times a company's operating profit covers the interest it owes on its debt over the same period. | Earnings before interest and taxes (EBIT) ÷ interest expense |
| Total Debt/Equity (MRQ) How many dollars a company has borrowed for each dollar of shareholders' equity on its balance sheet, a basic measure of how heavily it leans on lenders. | Total debt ÷ total shareholders' equity, from the most recent balance sheet |
Dividends
What a dividend pays you now and whether the business can keep paying it.
| Metric | Formula |
|---|---|
| Dividend yield The yearly cash dividend a share pays, expressed as a percentage of what the share costs today, so income can be compared across stocks at different prices. | Annual dividends per share ÷ current share price, shown as a percentage |
| Payout ratio The share of a company's profit, or of its free cash flow in the cash version, that it pays out to shareholders as dividends over the same period. | Dividends per share ÷ earnings per share; the cash version is dividends paid ÷ free cash flow |
Price and risk
How the price moves: its range, its trend and how hard it swings.
| Metric | Formula |
|---|---|
| 50-day and 200-day moving average The average closing price over the last 50 or 200 trading days, recalculated each day, used to show the direction of a stock's trend with day-to-day noise smoothed out. | Sum of the last N daily closes ÷ N for a simple average; an exponential average weights recent closes with a multiplier of 2 ÷ (N + 1) |
| 52-week range The span between the highest and the lowest price a stock has traded at during the most recent 52 weeks, updated each day as the oldest week rolls out of the window. | Highest and lowest price over the past 52 weeks; distance from the high is price ÷ 52-week high, minus 1 |
| ATR (14) A measure of how far a stock's price typically travels in one bar, counting overnight gaps, expressed in dollars and averaged over a set number of periods. | Average of the true range over N bars, usually 14, where true range is the largest of high minus low and the two gaps from the prior close |
| Beta A measure of how sensitive a stock's returns have been to the returns of a benchmark index, where 1.0 means it has moved in line with the market on average. | Covariance of the stock's returns with the market's returns ÷ variance of the market's returns |
| Days to cover The number of trading days it would take short sellers to buy back all borrowed shares if they used the stock's entire average daily volume. | Shares sold short ÷ average daily trading volume |
| RSI (14) A momentum oscillator from 0 to 100 that compares the size of recent up closes with recent down closes, so a high reading means gains have outweighed losses lately. | 100 − 100 ÷ (1 + RS), where RS is the average gain ÷ the average loss over N periods, usually 14 |
Ownership
Who holds the shares, who is buying and selling, and how the count changes.
| Metric | Formula |
|---|---|
| Insider ownership The percentage of a company's shares owned by the people who run or control it, alongside a record of their purchases, sales, grants and exercises reported to the SEC. | Shares held by officers, directors and holders of more than 10% ÷ shares outstanding |
| Institutional ownership The percentage of a company's outstanding shares held by institutional investment managers such as mutual funds, pension funds and hedge funds, compiled mostly from Form 13F reports. | Shares reported as held by institutional managers ÷ shares outstanding, shown as a percentage |
| Shares outstanding The number of a company's shares currently held by all its shareholders, insiders included, which is the denominator behind market cap, EPS and every other per-share figure. | Shares issued minus treasury shares; dilution is the percentage change in that count from one year to the next |