Earnings per share (EPS)-is net income divided by shares of the company stock outstanding. While this number is important it only really tells part of the story. EPS is needed to calculate the price to earnings ratio (PE). The PE ratio can be used to determine how investors value the stock. The EPS history is also important because it is needed to calculate earnings growth. Usually the companies with the higher earnings growth will have the higher PE. Earnings are reported quarterly. Companies will release basic EPS & diluted EPS. Diluted earnings are more conservative because they include unexercised stock options.
EBITDA-earnings before interest, taxes, depreciation and amortization.
Efficient market-theory that a stock's market price reflects all available information regarding the company's performance. People that follow this theory believe that it is impossible to beat the market so instead of looking for undervalued or high growth stocks, you might as well just put your money in an index fund. Some also believe that a monkey throwing darts at a newspaper has as good a chance to beat the market as any analyst or fund manager. This is also known as the Random walk theory.
Elephants-expression describing large institutional investors. The term implies that this big money moves in a herd-like manner.
ERISA-ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is the main federal statute that provides the regulatory framework within which retirement and pension plans must operate. ERISA imposes a variety of requirements on companies, including reporting and disclosure requirements and minimum participation and vesting requirements.
Eurodollars-U.S. currency that is used outside of the United States, esp. Europe.
Exchange-a market for buying and selling securities. The two national exchanges in the United States are the New York stock exchange and the American stock exchange. Regional exchanges include the Boston, Midwest, Pacific & Philadelphia exchanges. Some of the large foreign exchanges are:
Ex-dividend-interval between the record date and the payable date of the next dividend.
Updated 8/19/02
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