Investment Glossary

Dividend yield is the annual dividend payment divided by the share price, expressed as a percentage. It tells you how much cash return you receive relative to what you pay for the stock — but the quality and sustainability of that dividend matters as much as the headline number.

The portion of a company's net profit allocated to each outstanding share of common stock. A central metric in valuation, but one that can be distorted by share buybacks and non-recurring items.

Enterprise Value divided by EBITDA. A valuation metric independent of capital structure, making it useful for comparing companies with different debt levels. More comprehensive than P/E for cross-company comparison.

Free Cash Flow (FCF) is the cash a company generates from its operations after paying for capital expenditure — the money left over that can actually be used to return value to shareholders, pay down debt, or reinvest. It is widely considered the most reliable measure of a company's true earning power.

Market capitalisation (market cap) is the total market value of all a company's outstanding shares. It is calculated by multiplying the share price by the total number of shares outstanding, and it serves as the primary measure of a company's size in financial markets.

The P/E ratio (Price-to-Earnings ratio) divides a company's share price by its earnings per share. It is the most widely used valuation metric in equity investing — a quick measure of how much investors are paying for each dollar of current earnings.

The ratio of a company's share price to its book value per share. Measures how much investors pay relative to accounting equity. Most useful for asset-heavy industries; largely irrelevant for asset-light businesses.

Return on Equity (ROE) measures how efficiently a company uses shareholder equity to generate profit. A persistently high ROE — above 15–20% — is one of the clearest quantitative signals of a genuine competitive moat.

The rate at which a company's sales increase over time. The distinction between organic and acquisition-driven growth is analytically critical — only organic growth reflects the company's own structural momentum.