R-Squared (R2)

| Category: Financial.

Also known as the coefficient of determination, r-squared is the statistical measurement that comes from the correlation made between the performance of a certain investment and a specific benchmark index. Basically, r-squared shows what portfolio performance or degree of stock can be attributed to a certain benchmark index. Used especially when comparing models, r-squared is… Read more

Quick Ratio – Acid Test

| Category: Financial.

The quick ratio, also known as acid test ratio, is used to measure a company’s ability to pay off its current liabilities when these come due – but only with the company’s quick assets. The quick assets are those assets that are being owned by a company and which can be converted into cash in… Read more

Profit Margin Ratio

| Category: Financial.

In order to measure the amount of net income earned by a company with each dollar sales that are generated we use the profit margin ratio. Also known as gross profit ratio or the return of sales ratio, this is determined by comparing the net income with the net sales of a certain company. Basically,… Read more

Price to Sales

| Category: Financial.

Also a financial metric, the price to sales ratio is used to measure the value that the investors put on a certain company for each dollar of revenue that’s being generated by the said company. This is done by comparing the stock price with the total revenue of the business. The price to sales ratio… Read more

Price to Earnings P/E Ratio

| Category: Financial.

In today’s post, we’d like to focus our attention on the price to earnings ratio. This is a prospect ratio that calculates a stock’s market value. It does that by the market price per share with the earnings per share. With that in mind, this ratio indicates what the market is likely to pay for… Read more

Price to Cash Flow

| Category: Financial.

The price of a company is compared to the underlying cash flow by using the Price to Cash Flow profitability ratio, also abbreviated as P/CF. Basically, this ratio is used to determine how much a certain company is worth based on the cash flow it is able to generate. The Price to Cash Flow ratio… Read more

Price to Book Ratio

| Category: Financial.

The price to book ratio is renowned as an important financial valuation tool. Essentially, it is utilized in an attempt to appraise if a stock of a firm is undervalued or overvalued. It does that by comparing the net assets of the firm with the price of the existing shares. Fundamentally, it is supposed to… Read more

Present Value (PV)

| Category: Financial.

The present value is, many times, referred to as the discounted value – and it a widely used financial formula. So, what it is used for? Expressly, it estimates the amount of money that ought to be invested today, to equal the payment received on a specific future date. This concept is connected to the… Read more

Preferred Dividend Coverage Ratio

| Category: Financial.

This article will focus on presenting the specifications of the preferred dividend coverage ratio. This ratio assesses a corporation’s financial capability of paying the dividends owed to shareholders, depending on its net income. With that in mind, why do investors utilize it? That’s because it points how well a company is doing by comparing preferred… Read more

PEG Ratio

| Category: Financial.

What does the PEG ratio stand for? Why is it used and how could we define it? This article focuses on answering these specific questions. The PEG ratio stands for price earnings to growth, being regarded as an investment calculation that assesses the value of a stock, considering the current earnings and the potential anticipated… Read more