Stocks FAQs

  1. What does a high inventory turnover tell investors about a company?

  2. Why is it sometimes better to use an average inventory figure when calculating the inventory turnover ratio?

  3. How do you calculate working capital?

  4. How do changes in working capital affect a company's cash flow?

  5. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

  6. How do you calculate return on equity (ROE)?

  7. Why is the compound annual growth rate (CAGR) misleading when assessing long-term growth rates?

  8. What are the main differences between return on equity (ROE) and return on assets (ROA)?

  9. What are the main differences between compound annual growth rate (CAGR) and internal rate of return (IRR)?

  10. Are companies with a negative return on equity (ROE) always a bad investment?

  11. How do I calculate the inventory turnover ratio?

  12. Why is return on investment (ROI) a bad measure for calculating long-term investments?

  13. What factors go into calculating social return on investment (SROI)?

  14. How do I calculate the P/E ratio of a company?

  15. How can the price-to-earnings (P/E) ratio mislead investors?

  16. How can return on investment (ROI) calculations be manipulated?

  17. Is there value in comparing companies from different sectors by using the debt-to-equity ratio?

  18. What is the formula for calculating earnings per share (EPS)?

  19. What is the formula for calculating the current ratio?

  20. How do interest rates affect the weighted average cost of capital (WACC) calculation?

  21. What is considered a high debt-to-equity ratio and what does it say about the company?

  22. What are the best uses for trailing EPS, current EPS and forward EPS?

  23. How can the current ratio be misinterpreted by investors?

  24. What is the formula for calculating the debt-to-equity ratio?

  25. What's the difference between weighted average cost of capital (WACC) and internal rate of return (IRR)?

  26. What are the main differences between the current ratio and the quick ratio?

  27. Why is earnings per share (EPS) also known as “The Bottom Line”?

  28. How do I start using technical analysis?

  29. What is the difference between weighted average shares outstanding and basic weighted average shares?

  30. What does it mean when there is "price action"?

  31. What is a cross hedge?

  32. What is the difference between an options contract and a futures contract?

  33. What is the McGinley Dynamic?

  34. Do stocks that trade with a large daily volume generally have less volatility?

  35. Why is the 1982 AT&T breakup considered one of the most successful spinoffs in history?

  36. Which two companies underwent the biggest corporate merger of the 1990s?

  37. When holding an option through expiration date, are you automatically paid any profits, or do you have to sell the option and pay commissions?

  38. How do I value the shares that I own in a private company?

  39. How do I use the Nova/Ursa ratio?

  40. How do I employ a cash-and-carry trade?

  41. What is the significance of a Schedule 13D?

  42. What is high-frequency trading?

  43. Does the balance sheet always balance?

  44. What is the difference between an acquisition and a takeover?

  45. What does it mean when "N/A" appears for a company's P/E ratio?

  46. What was the first company with a $1 billion market cap?

  47. What is the Coppock curve?

  48. Why would a company do a reverse merger instead of an IPO?

  49. What is the difference between return on equity and return on capital?

  50. What are the penalties for withdrawing from my Traditional IRA less than a year after acquisition?

  51. How do I use a premium put convertible?

  52. What business processes were used to establish the Chevrolet motor company?

  53. What are pro forma earnings?

  54. What is the cheapest, fastest way to research, buy and trade stock?

  55. My brokerage firm won't allow naked option positions. What does this mean?

  56. Which is the best index to use to study the possible future price action of a given small-cap stock?

  57. Can investors short sell pink sheet or over-the-counter stocks?

  58. At what point in the ordering process does a broker charge commission?

  59. Where can I find a list of all of the stocks in the S&P 500?

  60. What's the difference between absolute P/E ratio and relative P/E ratio?

  61. Can technical analysis be called a self-fulfilling prophecy?

  62. What do the "BxA" numbers on my brokerage's trading screen mean?

  63. Where can I find information about pre- and after-hours trading on the NYSE and the Nasdaq?

  64. What should I use as a benchmark for my small-cap stock portfolio?

  65. What happens to the stock prices of two companies involved in an acquisition?

  66. What does it mean to use technical divergence in trading?

  67. What is Fibonacci retracement, and where do the ratios that are used come from?

  68. What does the term "stock-for-stock" mean?

  69. When does one sell a put option, and when does one sell a call option?

  70. Why would a multinational corporation conduct a vertical foreign direct investment?

  71. What is the best method of analysis for forex trading?

  72. What is the "Nifty 50"?

  73. What does it mean when a stock trades on the Pink Sheets or the OTCBB?

  74. Is it possible for a company to have a positive cash flow and a negative net income?

  75. What is the pitchfork indicator that I keep hearing about, and how do I use it?

  76. What is the difference between a logarithmic price scale and a linear one?

  77. Where do I place my target when the price of a stock breaks out of a technical chart pattern?

  78. What do the bracketed numbers following a technical indicator mean?

  79. Is scalping a viable forex trading strategy?

  80. What is a blank-check company?

  81. What's the difference between "top-down" and "bottom-up" investing?

  82. What's the difference between a straddle and a strangle?

  83. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always a better investment than a stock with a higher one?

  84. What is the difference between economic value added and market value added?

  85. Why would my stock's value decline despite good news being released?

  86. If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

  87. What are managed futures?

  88. How do I take qualitative factors into consideration when using fundamental analysis?

  89. Short selling vs. purchasing a put option: how do the payoffs differ?

  90. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to it if it dips below $27, and I want to do all this in one trading order. What type of order should I use?

  91. What is the difference between leverage and margin?

  92. What is a GTEM order?

  93. What is the "random walk theory" and what does it mean for investors?

  94. How does pyramiding work?

  95. What number of shares determines adequate liquidity for a stock?

  96. What is the difference between options and futures?

  97. How can I hedge against rising diesel prices?

  98. Would a slow stochastic be effective in day trading?

  99. In M&A how does an all-stock or all-cash deal affect the equity of the buying company?

  100. What is a virtual trailing stop order (VTSO)?

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