Glossary

Plain-English definitions of the financial terms used on this site, from revenue to EPS.

Revenue

The total amount a company earns from selling goods or services before any costs are deducted. Also called the top line.

Gross Profit

Revenue minus the cost of goods sold (COGS). Shows how much a company keeps after direct production costs.

Operating Income

Profit from core business operations before interest and taxes. Gross profit minus operating expenses (R&D, SG&A).

Net Income

The bottom line -- profit remaining after all expenses, interest, and taxes. Belongs to shareholders.

EBITDA

Earnings before interest, taxes, depreciation, and amortization. A rough proxy for operating cash generation.

EPS (Earnings Per Share)

Net income divided by shares outstanding. Diluted EPS assumes all convertibles are exercised.

Current Ratio

Current assets divided by current liabilities. Measures short-term liquidity; above 1 is generally healthy.

Debt-to-Equity

Total liabilities divided by shareholders equity. Shows funding by debt versus owners.

Return on Equity (ROE)

Net income divided by shareholders equity. Measures how efficiently a company uses owners capital.

Free Cash Flow

Operating cash flow minus capital expenditures. The cash genuinely available to the business.

Market Capitalization

Share price multiplied by shares outstanding. The total market value of a company.

P/E Ratio

Share price divided by earnings per share. A valuation multiple (needs a market price, not in SEC filings alone).

Dividend

A portion of profits paid to shareholders, usually in cash per share.

10-K

The annual report public companies must file with the SEC. Contains audited financials and a business description.

10-Q

The quarterly report filed with the SEC. Contains unaudited financial statements.

8-K

A current report filed to announce major events (M&A, leadership changes, earnings) to investors.

EDGAR

The SECs official database of public company filings (Electronic Data Gathering, Analysis, and Retrieval).

XBRL

eXtensible Business Reporting Language -- the tagged data format used in SEC filings for machine-readable financials.

SIC Code

Standard Industrial Classification -- a 4-digit code describing a companys industry.

Fiscal Year (FY)

A companys accounting year, which may not match the calendar year.