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Growth & profitability

Revenue CAGR (compound annual growth rate)

(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1

Terms: CAGR · ^ (exponent) · Revenue (net sales)

How much revenue grew per year on average, smoothing out year-to-year swings.

rule of thumbRoughly 5%+ reads as a growth company; negative reads as shrinking.

Operating margin

operating income ÷ revenue × 100

Terms: Operating income · Revenue (net sales)

How much operating profit is left per $100 of revenue — reflects pricing power and cost structure.

rule of thumbVaries a lot by industry: often 5–10% for manufacturers, 20%+ for software. Compare within the same industry.

Net margin

net income attributable to the company ÷ revenue × 100

Terms: Net income (attributable to the company)

The final profit margin after non-operating items and taxes.

rule of thumbA big gap from the operating margin in a given year is worth checking for a one-off item.

Stability & cash flow

Equity ratio

total equity ÷ total assets × 100 (as reported in the 10-K)

Terms: Stockholders’ equity · Total assets

The share of total assets funded by equity rather than debt.

rule of thumb50%+ is generally read as stable. Real estate, leasing, and similar capital-intensive industries tend to run lower.

Free cash flow (FCF)

cash flow from operations − capital expenditures

Terms: Free cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)

Cash left over after funding the business’s own investment — the source of dividends and debt paydown.

rule of thumbConsistently positive is preferred. A negative year during heavy investment can still be healthy, depending on what it funded.

Capital efficiency (ROIC and WACC)

ROE (return on equity)

net income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)

Terms: Net income (attributable to the company) · Stockholders’ equity

How much profit was generated on shareholders’ own money.

rule of thumbRoughly 10%+ is often cited as solid for a U.S. company, though this varies by industry.

EV/EBITDA

(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)

Terms: EV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)

How many years of EBITDA it would take to buy the whole company (market cap + debt − cash, ÷ EBITDA). Market cap here is approximated from period-end P/E × net income.

rule of thumbLevels vary a lot by industry — compare against peers or the company’s own history. Not computed for financial companies.

P/B (price-to-book ratio)

P/E × EPS ÷ BVPS (= period-end share price ÷ book value per share)

Terms: P/B · P/E · EPS · BVPS

Share price as a multiple of book value per share. Since this site doesn’t hold a price feed, period-end price is approximated as the filing’s P/E × EPS.

rule of thumbBelow 1x (shown in red) means the market values the company below its accounting net worth.

ROIC (return on invested capital)

operating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)

Terms: Operating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity

The after-tax return on all money invested in the business (equity plus borrowed money).

rule of thumbWhether it exceeds WACC is the key question.

WACC (weighted average cost of capital)

cost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight

Terms: Cost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization

The blended return shareholders and lenders require, weighted by how the company is actually financed — its "cost of money."

rule of thumbOften in the high-single-digit percent range for large U.S. companies.

Cost of equity (CAPM)

risk-free rate + β × equity risk premium

Terms: CAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)

The return shareholders expect. This site’s defaults: a risk-free rate of 4% (10-year Treasury yield, as of 2026-09), each company’s own price-derived adjusted beta where available (otherwise 1), and an equity risk premium of 5.5%.

rule of thumbEvery company page lets you change these assumptions and see the effect.

Approximate market value of equity

P/E × net income ≈ period-end share price × shares outstanding (= market cap)

Terms: P/E · Net income (attributable to the company) · Market capitalization · Market value of equity

WACC’s weighting uses the market value of equity. Since this site doesn’t hold a price feed, it’s approximated from the filing’s P/E and net income.

rule of thumbFor a year with no P/E (e.g. a loss year), book equity is used instead.

Cost of debt

interest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)

Terms: Interest-bearing debt · Risk-free rate

The rate the company is actually paying on its borrowings.

rule of thumbA company with little or no debt uses the risk-free rate instead.

ROIC − WACC spread

ROIC − WACC (positive means the business earns more than its cost of capital)

Terms: ROIC · WACC

The gap between ROIC and WACC.

rule of thumbConsistently positive means value creation; consistently negative means value destruction. Look at both the size and the consistency of the gap.

Earnings quality

Operating CF ÷ net income (cash conversion)

cash flow from operations ÷ net income attributable to the company

Terms: Cash flow from operations (operating CF) · Net income (attributable to the company)

How much of reported profit is actually backed by cash.

rule of thumb1x+ is healthy. Several years below 1x is worth a closer look.

Accrual ratio

(net income − operating CF) ÷ average total assets × 100

Terms: Net income (attributable to the company) · Cash flow from operations (operating CF) · Total assets

The size of non-cash accounting profit (largely estimates). Higher values are associated with profit that tends to fade in later periods.

rule of thumbAbove 5% is worth watching; negative suggests profit is well backed by cash.

Core-earnings share

operating income ÷ income before income taxes × 100

Terms: Operating income · Income before income taxes (pretax income)

The share of pretax income coming from the core business (operating income).

rule of thumb70%+ suggests operations drive most of the profit. Lower values are worth checking against interest income, equity-method gains, etc.

Days sales outstanding

period-end receivables ÷ revenue × 365

Terms: Accounts receivable · Revenue (net sales)

The average number of days it takes to collect cash for a sale.

rule of thumbA sudden jump is worth checking for looser collection terms or channel stuffing.

Days inventory outstanding

period-end inventory ÷ revenue × 365

Terms: Inventory · Revenue (net sales)

How many days of inventory the company is holding.

rule of thumbRising days without rising sales can flag a buildup of unsold inventory.

House style for a few terms

Net income (attributable to the company)

Wherever this site says "net income" without qualification, it means net income attributable to the company (i.e. net of noncontrolling interests).

Stockholders’ equity

The denominator for ROE and the equity ratio — stockholders’ equity as reported, excluding noncontrolling interests.

Total equity

Total equity as reported on the balance sheet, including noncontrolling interests. Used in ROIC’s invested capital (interest-bearing debt + total equity).

Market value of equity

In WACC, "cost of equity," "market value of equity," and "equity weight" refer to the market’s valuation of the shares (approximated via market cap), not accounting book equity.

Where the data comes from

Revenue, profit, total assets, equity, cash flow, EPS, the equity ratio, ROE, and P/E are pulled from each 10-K’s five-year selected financial data and consolidated financial statements via SEC EDGAR’s XBRL company-facts API. Interest-bearing debt is the sum of short- and long-term borrowings and notes/bonds payable; it excludes operating lease liabilities.