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Assets are of two kinds - current and fixed. Current assets can be quickly converted to cash. These include bank accounts (cash), treasury securities that the company owns, the stocks that the company owns, accounts receivable, inventory, and raw material. Fixed assets are bulkier assets such as, building, land, machinery, and various equipments. Accumulated depreciation is subtracted from the original cost of buildings, machinery, and equipment. Read more about depreciation under net-income. Companies deduct depreciation, as a cost, from income. This depreciation is accumulated over a number of years for future replacement or upgrading of outdated, old, or non-functional buildings, machinery, and equipment. Net asset is the sum of current and fixed assets.
BETA is a term used to rate the relative volatility of a stock compared to the market in general. A rating of 1 would imply that the percentage change in the price of the stock is same as the percentage change in the entire market. A rating of 0.9 would imply that the percentage change in the price of the stock is 0.9% while the percentage change in the market is 1%. A BETA of less than 1 means that the stock is less volatile compared to the market. Whereas, a BETA of more than 1 means that the stock is more volatile compared to the market.
Bollinger Bands are plotted two standard deviations above and below a daily moving average (DMA). A 20-day period is optimal for calculating Bollinger Bands. For more information on Bollinger Bands, Click Here.
Cost of raw materials.
Total debt is the sum of short-term and long-term debts, capital leases, etc.
Daily Moving Average (DMA) or Simple Moving Average (SMA) of price shows average price of a security over a period of days. The length of this period depends on the duration of price cycle you wish to follow. If you are interested in 25 days (5 weeks) cycle, then you should focus on the DMA over 50 days ( = 2 times 25). If you are interested in 100 days cycle, focus on the DMA over 200 days.
The second type of moving average is the exponential moving average (EMA). For more information on DMA and EMA, Click Here.
Three different growth rates are described below. The quantity A could be revenue, profit, etc.
Say, quantity A in year one is A1. After N years, i.e. in year N+1, A is AN+1. Then,
Say, the quantity A is AC in the current quarter and is AP for the quarter one year ago. Then,
Say, the quantity A is A1 for the trailing twelve months and is A0 for the trailing twelve months one year ago. Then,
In some reports, the Income from Operations is labeled as Income Before Depreciation.
Measures how quickly the Inventory is sold. It is calculated as the Cost of Sales (for the trailing 12 months) divided by the Average Inventory. Higher Turnover is better.
This is a rating of companies based on their earnings performance. The rating is calculated from a company's short-term and long-term earnings growth. EPS Rating is given on a percentile scale from 1 to 99, with 99 being the best.
By taking a stock's current price and its price one year ago, a percent change in price is calculated. This change is compared with the same for every other publicly traded company on a scale of 1 to 99, with 99 being the highest.
Compares a company's industry group price performance over the past 6 months to the other 196 industry groups. The ranking is from A to E, with A being the best.
A combination rating that includes company's sales growth, profit margin, and return on equity. The ranking is from A to E, with A being the best.
A rating computed from the price movement and trading volume of a stock in the latest 13 weeks. The calculation spanning a 13 weeks period eliminates most of the short term fluctuations and gives the general trend in the buying/selling activity. A and B ratings indicate heavy to moderate buying, C shows a neutral balance of buying and selling.
Liabilities are of two kinds - short-term and long-term. Short-term liabilities are debts or payments that have to be paid within one year. These include accounts payable, short-term debt, current part of long-term debt, capital leases, accrued expenses, income tax due, etc. Long-term liability includes mortgages, deferred charges, long-term debt, capital leases, etc. Net liability is the sum of short-term and long-term liabilities.
Moving Average Convergence-Divergence (MACD) is the difference between the 26-day and 12-day exponential moving averages. The 9-day exponential moving average of MACD is called the "signal" or the "trigger" line. When the value of the signal is less than the MACD, then we call it a negative MACD situation. Conversely, when the value of the signal is more than the MACD, then we call it a positive MACD situation. For more information on MACD, Click Here.
Market Cap is obtained by multiplying the number of outstanding shares by the price per share. Micro-cap companies have a Market Cap of less than $150 million; Small-Caps between $150 million and $500 million; Mid-Caps between $500 million and $5 billion; Large-Caps over $5 billion.
The Money Flow Index (MFI) is an indicator that measures the strength of money flowing in and out of a security. MFI incorporates both price and volume. For more information on MFI, Click Here.
Interest income is from cash in bank or income producing securities. Other income is from other securities, real estate, and investments that the company may own. Interest Expense is the interest company pays on debts. Depreciation is the gradual decline in the value of assets such as buildings and equipment. It is not a cash outlay but a reduction in service life of the property.
Net Income may be reported at a quarterly (3 months) basis or on an annual basis.
When a security closes higher than the previous close, all of the days volume is considered up or positive volume. When a security closes below the previous close, all of the days volume is considered down or negative volume. A running total of up (positive) and down (negative) volume is the On Balance Volume (OBV). For more information on OBV, Click Here.
Operating expense has two parts - SGA and R&D. SGA (selling, general, and administrative) includes salaries, overhead, accountants and lawyers fees, advertising, etc. R&D (research and development) includes cost of new product development or other developmental work to run the business more efficiently.
PEG ratio is constructed from the PE and the annualized earnings growth rate. Calculate annualized growth rate of earnings, then
Price of a stock does not go up or down along straight lines, but follows a zigzag path forming peaks and troughs. The duration of these peaks and troughs are known as cycles. However, these durations are of various lengths. Short-term peaks and troughs are superposed on long-term peaks and troughs. Long-term peaks and troughs are superposed on longer-term peaks and troughs, and so on. The cycles are classified as: short-term cycles of 3 to 6 weeks duration, intermediate-term cycles of 6 weeks to 9 months duration, primary cycle of 9 months to 2 years duration, and finally, secular cycles of 8 to 12 years duration. This classification has many variations.
Investors, depending on their style of investment, tend to follow one of these cycles.
A ratio measuring the liquidity of a company. The ratio compares the availability of cash and assets convertible to cash to the bills that are due in a short period of time.
Measures the amount of Accounts Receivable. It is calculated as Revenue (for the trailing 12 months) divided by the Average Accounts Receivable. Higher turnover is better.
The dollar value of all products and services sold over the course of a year.
Relative Strength Index (RSI) is a price following oscillator that ranges between 0 and 100. RSI below 30 shows an undersold situation, and RSI above 75 is an oversold situation. For more information on RSI, Click Here.
Volume is the number of shares transacted in one business day.