GLOSSARY

Glossary

Every accounting, finance, and investing term used on a company page, grouped by topic. Formulas and financial-table row labels link straight here.

Filings & disclosure basics

Form 10-K (annual report): The annual disclosure document U.S. public companies file with the SEC. It covers the business description, risk factors, management’s discussion & analysis, and audited financial statements. It is the primary source for this site’s numbers and analysis.
SEC EDGARElectronic Data Gathering, Analysis, and Retrieval: The SEC’s free system for filing and viewing company disclosures, including structured XBRL data. This site pulls financial figures from EDGAR’s API and links each figure back to the original filing.
Consolidated: Figures that combine a parent company with its subsidiaries into one set of numbers. U.S. 10-Ks report on a consolidated basis by default — unlike some countries, there is no separate "parent-only" statement to distinguish.
U.S. GAAPGenerally Accepted Accounting Principles: The accounting standard used by nearly all U.S.-domiciled public companies. This site’s formulas assume a U.S. GAAP income-statement shape (operating income → other income/expense → pretax income → tax → net income).
IFRSInternational Financial Reporting Standards: The accounting standard used by many non-U.S. companies. A "foreign private issuer" may file a Form 20-F under IFRS instead of a 10-K under U.S. GAAP — line items and terminology can differ somewhat from what this glossary assumes.
Segment: A breakdown of results by line of business or geography, disclosed under U.S. GAAP segment reporting (ASC 280). Useful for seeing which businesses actually drive revenue and profit at a multi-business company.
Fiscal year (FY): A company’s 12-month accounting period. Most U.S. companies use the calendar year (ending Dec 31), but some don’t — Apple’s fiscal year ends in late September, Walmart’s ends Jan 31. This site labels each period "FY" + the year the company itself uses.

Income statement

Revenue (net sales): Total amount earned from selling goods or services, net of returns and discounts.
Operating income: Revenue minus cost of revenue and operating expenses (SG&A, R&D, etc.) — profit from the core business before interest and taxes.
Income before income taxes (pretax income): Operating income adjusted for non-operating items — interest expense, interest income, equity-method earnings, other income/expense — before the tax provision is applied. This is the U.S. GAAP line that plays the role some other countries give to a distinct "ordinary income" figure.
Unusual or infrequent items: One-time items such as asset-sale gains, impairments, or restructuring charges. U.S. GAAP stopped requiring a separate "extraordinary items" category in 2015 (ASU 2015-01); these are now reported within continuing operations, typically inside operating expenses or other income/expense.
Net income (attributable to the company): Bottom-line profit after all expenses and taxes, net of the portion belonging to noncontrolling interests. Where this site or a chart says "net income" without qualification, this is the figure meant — it also feeds ROE, EPS, the payout ratio, and cash-conversion calculations.
Operating margin: How many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
Formula: operating income ÷ revenue × 100
Net margin: Net income as a share of revenue. A big gap versus the operating margin is worth checking against that period’s non-operating items.
Formula: net income attributable to the company ÷ revenue × 100
CAGRCompound Annual Growth Rate: Smooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
Formula: (last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
^ (exponent): In a formula, "^" means "raised to the power of." "^(1÷4)" is a fourth root, used to convert four years of growth into an annualized rate.

Balance sheet & cash flow

Total assets: Everything the company owns — cash, receivables, inventory, property & equipment, investments — added up.
Total equity: Total assets minus total liabilities. Includes noncontrolling (minority) interests, unlike "stockholders’ equity." This site uses it as the equity component of invested capital in ROIC.
Stockholders’ equity: Total equity minus noncontrolling interests — the portion belonging to the parent company’s own shareholders. This site uses the as-reported figure as the denominator for ROE and the equity ratio.
Market value of equity: In WACC, "cost of equity," "market value of equity," and "equity weight" all refer to what the market thinks the shares are worth (approximated here via market cap), not the accounting book value of stockholders’ equity.
Equity ratio: The share of total assets funded by equity rather than debt. 50%+ is commonly read as financially stable, though the right level depends heavily on the industry.
Formula: total equity ÷ total assets × 100 (as reported in the 10-K)
Interest-bearing debt: Borrowings that carry interest — short- and long-term debt, notes/bonds payable, commercial paper. This site’s figure excludes operating lease liabilities.
Cash flow (CF): The actual cash that came in and went out over the year — unlike profit, it isn’t affected by accounting estimates.
Cash flow from operations (operating CF): Cash actually generated by the core business. Normally positive; the more it exceeds reported profit, the better that profit is backed by cash.
Cash flow from investing (investing CF): Cash spent on or raised from capital expenditures, acquisitions, and securities purchases/sales. Usually negative for a company investing in growth.
Cash flow from financing (financing CF): Cash flows from borrowing/repaying debt, dividends, and share buybacks or issuance.
Free cash flow (FCF): Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF.
Formula: cash flow from operations − capital expenditures
Capital expenditures (capex): Spending on long-lived assets — plants, equipment, stores, systems. This site uses the amount reported in the filing’s capex discussion, or the purchases-of-PP&E line from the cash flow statement when that isn’t broken out separately.
Depreciation & amortization (D&A): The cost of long-lived assets spread over their useful life. Capex consistently above D&A is a rough signal of expansion rather than mere maintenance.
Capex ÷ D&A: Well above 1x suggests capacity expansion; around 1x suggests mostly replacement/maintenance; below 1x suggests underinvestment.
Formula: capital expenditures ÷ depreciation & amortization
Research & development (R&D): Spending on developing new products, technology, or services, as disclosed in the filing.
R&D-to-revenue ratio: How much of revenue is reinvested into R&D. Varies a lot by industry — often 10%+ for software/pharma, low single digits for many industrials.
Formula: research & development expense ÷ revenue × 100
M&A (mergers & acquisitions): Buying another company or business. This site sums the cash-flow-statement lines for acquisitions, net of cash acquired.
Accounts receivable: Money owed by customers for goods or services already delivered but not yet paid for.
Inventory: Goods, materials, and work-in-progress held for sale.

Capital efficiency & cost of capital

ROEReturn on Equity: How much profit was generated on shareholders’ own money (equity). Roughly 10%+ is often cited as a solid level for a U.S. company, though the right benchmark varies by industry and capital intensity.
Formula: net income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
ROICReturn on Invested Capital: After-tax operating profit as a share of all the money invested in the business (equity plus interest-bearing debt). Comparing it against WACC shows whether the company is creating value.
Formula: operating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
Invested capital: Money invested in the business. This site computes it as interest-bearing debt + total equity, averaged between the start and end of the period.
Effective tax rate: The combined rate applied to pretax income. This site’s default (21%) is the U.S. federal statutory corporate rate; it excludes state income taxes, which vary by state and push most companies’ effective rate somewhat higher.
WACCWeighted Average Cost of Capital: The blended return that shareholders and lenders require, weighted by how much money came from each. It’s the company’s "cost of money" — commonly in the high-single-digit percent range for large U.S. companies, though it varies with risk and leverage.
Formula: cost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
Equity weight (E/(D+E)): Market value of equity ÷ (market value of equity + interest-bearing debt). The weight applied to cost of equity in WACC. E = Equity, D = Debt.
Debt weight (D/(D+E)): Interest-bearing debt ÷ (market value of equity + interest-bearing debt). The weight applied to cost of debt in WACC.
(1 − tax rate): Interest expense is tax-deductible, so debt has a lower after-tax cost than its stated interest rate. WACC multiplies the cost of debt by (1 − tax rate) to reflect this.
Cost of equity: The return shareholders expect from holding this stock. From the company’s side, it’s the cost of the money shareholders provided. This site computes it via CAPM.
Formula: risk-free rate + β × equity risk premium
CAPMCapital Asset Pricing Model: A model for cost of equity: risk-free rate + β × equity risk premium.
Risk-free rate: The return on a near-riskless investment — typically the 10-year U.S. Treasury yield. This is a manually set snapshot value, not fetched live; check it against the current 10-year yield.
β (beta): How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
Formula: 0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
Equity risk premium (market risk premium): The extra return equity investors demand over Treasuries. Commonly cited U.S. estimates run roughly 4.5–6%.
Cost of debt: The rate the company is actually paying on its borrowings. This site computes it as interest expense ÷ interest-bearing debt.
Formula: interest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
Market capitalization: Share price × shares outstanding — what the market thinks the equity is worth. This site approximates it as P/E × net income, since (price ÷ EPS) × net income = price × share count, avoiding the need for a separate price feed.
Formula: P/E × net income ≈ period-end share price × shares outstanding (= market cap)
ROIC − WACC spread: The difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
Formula: ROIC − WACC (positive means the business earns more than its cost of capital)
EBITDAEarnings Before Interest, Taxes, Depreciation, and Amortization: Operating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
EV/EBITDA: Enterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation.
Formula: (market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
P/BPrice-to-book ratio: Share price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site derives period-end price from P/E × EPS as reported in the filing, and highlights sub-1x readings.
Formula: P/E × EPS ÷ BVPS (= period-end share price ÷ book value per share)

Earnings quality

Operating CF ÷ net income (cash conversion): How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
Formula: cash flow from operations ÷ net income attributable to the company
Accrual ratio: The size of non-cash accounting profit (e.g. a rise in receivables) relative to total assets. A higher ratio is associated in academic research with profit that tends to fade in subsequent periods (the Sloan accrual anomaly).
Formula: (net income − operating CF) ÷ average total assets × 100
Core-earnings share: The share of pretax income coming from operating income. When it’s low, check how much interest income, equity-method earnings, or other non-operating items are contributing.
Formula: operating income ÷ income before income taxes × 100
Days sales outstanding (DSO): The average number of days it takes to collect cash for a sale. A sudden increase can flag weaker collection terms or channel stuffing.
Formula: period-end receivables ÷ revenue × 365
Days inventory outstanding (DIO): How many days of inventory the company is holding. Rising days without rising sales can flag a buildup of unsold inventory.
Formula: period-end inventory ÷ revenue × 365

Per-share figures & shareholder returns

EPSEarnings per Share: Net income ÷ shares outstanding. Stock splits change this figure, so this site restates every period onto the most recent period’s share count.
BVPSBook Value per Share: Stockholders’ equity ÷ shares outstanding.
P/EPrice-to-earnings ratio: Share price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
Dividend per share: Total annual dividend paid per share (sum of all declared payments for the year).
Payout ratio: The share of earnings paid out as dividends.
Formula: dividend per share ÷ diluted EPS × 100
Total payout ratio: (Dividends + share buybacks) ÷ net income — the combined size of cash returned to shareholders through both channels.
DOEDividends on Equity: Annual dividends paid ÷ stockholders’ equity. Less sensitive to a single year’s earnings swings than the payout ratio, so sometimes used as a stable-dividend benchmark.
Share buyback (repurchase): The company buying back its own shares from the market. Reduces share count, raising per-share metrics like EPS, and is a common way to return cash to shareholders alongside dividends.
Stock split: Dividing each share into multiple shares. Price and per-share figures shrink proportionally, but the company’s overall value is unchanged.

Risk

Geopolitical risk: The risk that political, military, or diplomatic tension in a given region — conflict, sanctions, tariffs, export controls — affects a company’s sourcing, sales, currency exposure, or energy costs.
Risk map: A chart placing each disclosed risk on two axes: impact on results, and likelihood. Risks toward the upper right are the most important to watch. This site’s placement is drawn from the 10-K’s "Risk Factors" section, and the impact/likelihood scoring is this site’s own assessment.
BCPBusiness Continuity Plan: A plan to keep critical operations running, or restore them quickly, after a disaster or major disruption.

Roughly what level counts as good for each metric is explained in How to read this.