Investing - All Content

  1. What is the difference between the current ratio and the acid test ratio?

    Read about the main differences between the acid-test ratio and the current ratio, two measures of a company's liquidity ...
  2. What is the difference between debt to income and debt to assets?

    Understand the differences between the debt-to-income ratio and the debt to assets ratio as they apply to personal and corporate ...
  3. How is it possible to trade on a stock you don't own, as is done in short selling?

    Understand how the process of short selling allows a person to sell a stock he or she doesn't technically own by borrowing ...
  4. What is the difference between dividend yield and dividend payout ratio?

    Understand the difference between the dividend yield and the dividend payout ratio, two basic investment valuation measures ...
  5. How do I calculate the acid test ratio on a balance sheet?

    Learn how to quickly calculate a company's acid-test ratio based on the figures listed on its balance sheet. See how companies ...
  6. What kinds of restrictions does the SEC put on short selling?

    Learn about the rules and regulations on short selling enforced by the U.S. Securities and Exchange Commission, or SEC, including ...
  7. When short selling, how long should you hold on to a short?

    Explore the reasons for short selling and the various factors that influence how long an investor may wish to maintain a ...
  8. What is the difference between cash flow and revenue?

    Understand the difference between cash flow and revenue as they relate to corporate accounting and the financial evaluation ...
  9. How useful is ROCE as an indicator of a company's performance?

    Understand the meaning, significance and usefulness of return on capital employed as a measure of a company's financial performance
  10. If a company has a low price to book ratio, does this mean its stock is undervalued?

    Learn the usefulness of the price-to-book ratio, a primary equity valuation measure, and determine how it can best be used ...
  11. What is the difference between yield and rate of return?

    Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept ...
  12. What is the difference between yield and dividend?

    Learn how to differentiate between dividend yield and dividend return, and see why dividend yield is the more popular rate ...
  13. Why is buying a utility stock known as defensive move?

    Utility stocks are known as defensive stocks for investors due to the fact that consumer demand will remain high even when ...
  14. What is the downside of investing in the utility sector?

    Learn about the pros and cons of investing in the utility sector, and determine whether the steady dividend income possibility ...
  15. What are KPIs?

    Key performance indicators (KPI) measure success in attaining predetermined goals.
  16. What's a Break-Even Analysis?

    Most businesses have fixed costs such as rent and salaries, as well as costs for raw materials. Break-even analysis shows ...
  17. Top Strategies Remote Traders Should Follow

    Most traders cannot watch every tick because they have lives away from the markets. These folks can take simple steps to ...
  18. The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  19. Should You Buy US Penny Stocks Or Emerging Market Stocks?

    While in the same asset class, emerging market stocks and US penny stocks have significant differences that can impact your ...
  20. How do I effectively create a Range-Bound trading strategy?

    Understand the basics of trading range-bound securities, including how to profit from the relative predictability of the ...
  21. How are dividends usually paid out?

    Discover the two compensation methods commonly used by companies and mutual funds to make dividend payments on equity investments.
  22. How are rectangle patterns interpreted by analysts and traders?

    Understand the basics of the rectangle chart pattern, how it is created, and how traders and analysts interpret this pattern ...
  23. What are the top trends in corporate social responsibility?

    Learn about top trends in corporate social responsibility. Companies are increasing transparency, innovating, investing locally ...
  24. What is the Positive Volume Index (PVI) formula and how is it calculated?

    Understand how traders and analysts use the Positive Volume Index indicator, the theory behind it and the formula used to ...
  25. How do I build a profitable strategy when spotting a rectangle pattern?

    Understand how to utilize the rectangle chart pattern to establish long- and short-term trading strategies, including optimal ...
  26. How does lack of corporate social responsibility hurt a company's bottom line?

    Learn about the perils of a lack of corporate social responsibility. Examine the WorldCom fraud, which led to its bankruptcy ...
  27. How effective is creating trade entries after spotting a rectangle pattern?

    Understand the basics of the rectangle chart pattern, and learn how effective it is as a basis for short- and long-term trading ...
  28. What are the due diligence basics for investing in a startup?

    Learn about due diligence basics for investing in a startup, which includes an exit plan, a harvest strategy and evaluating ...
  29. What is the difference between intrinsic value and current market value?

    Discover the differences between intrinsic and market values, what makes the former difficult to determine and how investor ...
  30. What are the main risks involved in Range-Bound trading strategies?

    Understand how range-bound trading works and what risk is inherent in this type of trading strategy, including how unexpected ...
  31. What industries tend to use discounted cash flow (DCF), and why?

    Understand the valuation method of discounted cash flow analysis and why it is more suitable for evaluating certain industries ...
  32. Top 10 Largest Global IPOs Of All Time

    We have compiled a list of the top 10 largest IPOs of all time. The results may surprise you.
  33. Is it important for a company always to have a high liquidity ratio?

    Understand the significance of the liquidity ratio and how it is used in conjunction with other measures to arrive at an ...
  34. How risky is it to enter into a debenture agreement?

    Understand the nature of debenture agreements and the inherent risks and clauses that may provide additional protection for ...
  35. What is the difference between ROCE and ROI?

    Understand the difference between return on capital employed and return on investment and how analysts use these performance ...
  36. What is the difference between ROCE and ROOC?

    Find out about the differences between return on capital employed and return on operating capital, two accounting ratios ...
  37. To what extent should you take a company's liquidity ratio into account before investing ...

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying ...
  38. If I reinvest my dividends, are they still taxable?

    Take a brief look at how the Internal Revenue Service taxes different kinds of dividends, including taxation on dividends ...
  39. How can a company quickly increase its liquidity ratio?

    Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios ...
  40. What is the difference between ROCE and ROA?

    Understand the difference between the profitability ratios of return on capital employed and return on assets, and learn ...
  41. How is a debenture stock different from a regular debenture?

    Learn to differentiate between standard debentures and debenture stocks, which are equities that act more like preferred ...
  42. What is the difference between ROCE and ROE?

    Discover how investors and analysts utilize the return on equity and return on capital employed ratios to gauge financial ...
  43. What happens if you don't hedge your investments?

    Learn the purpose, advantages and disadvantages of hedging, and find out how to utilize hedging to enhance an overall investment ...
  44. How can I find out what date(s) I am supposed to be entitled to ex-dividends?

    Understand the various dates associated with payment of stock dividends and specifically how the determining ex-dividend ...
  45. What types of companies offer the most dividends?

    Find out which types of companies tend to offer the most dividends, and learn why dividends must be considered carefully ...
  46. Evaluate Your Investment Portfolio For 2015

    The beginning of a year is a good time to evaluate your investment portfolio and think about how to position it going forward. ...
  47. Gary Gordon Positions Your Portfolio For 2015

    Seeking Alpha, the popular financial web portal, interviews Gary Gordon for its Positioning for 2015 series. Here is a transcript ...
  48. Cuba's Economy: Nowhere To Go But Up

    With relations improving between Cuba and America, here's a quick look at the island nation's slowly transforming economy. ...
  49. U.S. Stocks Are Still The Place To Be In 2015

    Oil is tumbling and volatility is in the tea leaves. So why is it that strategists are saying that your best bet for 2015 ...
  50. How To Explain Portfolio Rebalancing To Clients

    Letting an allocation to stocks get too large can expose you to more downside risk than you had bargained for. Here are tips ...
  51. Value at Risk (VaR)

    Value at risk, often referred to as VaR, measures the amount of potential loss that could happen in an investment or a portfolio ...
  52. What is Demand?

    Demand is the economic term for the cumulative wants and desires of consumers as they relate to a particular good or service. ...
  53. What's a Trade Deficit?

    A trade deficit occurs when a country’s imports exceed its exports for a given period of time. This means there is more coming ...
  54. What's a Trial Balance?

    A trial balance is a worksheet listing the debit or credit balances of all the ledger accounts for an entity. Under accounting ...
  55. Use the Book-to-Market Ratio

    The book-to-market ratio compares the book value of a company to the market value of that same company.
  56. Know the Forces At Play Behind The Buy/Sell Cycles

    Weekly Stochastics uncovers patterns of buying and selling pressure that can be predicted and capitalized upon by observant ...
  57. Volatility Can Drag On Leveraged ETF Gains

    The pros (many) and cons (several) of investing in S&P 500 leveraged ETFs.
  58. What are the different ways a CEO could influence stock prices?

    A CEO's influence on a stock price reflects the company's growth strategy and outlook, its financing needs and decisions ...
  59. Does a high price to book ratio correspond to a high ROE?

    Learn the correlation between the two equity valuations, price to book ratio and return on equity, and why it can be advantageous ...
  60. What are the regulations involved in releasing an ETF on the open market?

    Learn how an exchange traded fund comes to life, and find out about regulations surrounding ETF release from the Investment ...
  61. What is standard deviation used for in mutual funds?

    See how standard deviation is helpful in evaluating a mutual fund's performance. Use it in combination with other measurements ...
  62. What are the potential pitfalls of owning REITs?

    Learn about pitfalls to investing in REITs, such as investors having to pay income tax, the REIT having to pay property tax ...
  63. What is considered a good price to book ratio?

    Discover what is considered to be a good price-to-book ratio value, and learn the factors to consider when interpreting this ...
  64. What is the difference between operating margin and contribution margin?

    Understand the difference between two measures of profitability, operating margin and contribution margin, and the purpose ...
  65. What costs are not counted in gross profit margin?

    Explore the various measures of a company's profitability, such as gross, operating and net profit margins, and understand ...
  66. What is the proper ratio between working capital, current assets and current liabilities?

    Explore the working capital ratio, a basic liquidity measurement intended to represent the current relationship between a ...
  67. What are typical trust fund management fees?

    Learn about trust fund management fees, such as the annual management fee, annual expense ratio, brokerage commissions and ...
  68. Are dividend payout ratios different in different economic sectors?

    Discover which economic sectors have traditionally higher or lower dividend payout ratios and the various factors that determine ...
  69. What is a good operating margin for a business?

    Read about what it means to have a good operating margin and why that answer depends heavily on competitive and historical ...
  70. What is the difference between operating margin and EBITDA

    Understand the key differences between, and purposes of, two measures of profitability that companies use: operating profit ...
  71. How should you plan for scarcity when investing?

    Plan ahead for scarcity when you are investing so you can profit from emerging shortage trends and take advantage of prime ...
  72. How is gross profit margin used in sales?

    Learn and understand the meaning and usefulness of the gross profit margin figure for a company in relation to its total ...
  73. What is the difference between operating margin and return on sales?

    Discover how a small warning suggests a difference between return on sales, or ROS, and operating margin, two terms normally ...
  74. Are there leveraged ETFs that track the oil & gas drilling sector?

    Explore the investing options that are available through leveraged ETFs that can be used to track the oil and gas drilling ...
  75. Is volatility a good thing or a bad thing from the investor's point of view, and ...

    Learn the basics of volatility in the stock market and how the increased risk provides greater opportunities for profit for ...
  76. What is the difference between operating margin and profit margin?

    Understand the difference between operating margin and profit margin in relation to evaluating a company's profitability ...
  77. What's Diversification?

    Nearly everyone has heard the adage “don’t put all your eggs in one basket.” This, essentially, is the idea behind diversification. ...
  78. What To Do When Your Client Behaves Badly

    As a financial advisor managing your client's assets is only part of the job; sometimes you have to manage your client, as ...
  79. Position Your ETF Portfolio For Success In 2015

    2015 may well usher in a new era in the markets where things like risk management, trend following, and asset allocation ...
  80. These ETFs Track The Dow Jones Industrial Average

    A look at some of the ETFs tracking the Dow Jones Industrial Average.
  81. Eyeing Canada? Look At The iShares ECW ETF

    Canada is interesting place to look for hidden investing treasures. Consider the iShares MSCI Canada (EWC) ETF, but be wary ...
  82. What is the difference between a Sharpe ratio and a Traynor ratio?

    Understand the difference between two methods of evaluating portfolio returns on investment, the Sharpe ratio and the Treynor ...
  83. What are some possible red flags in a company's dividend payout ratio?

    Read about how investors and analysts use the dividend payout ratio to scrutinize the sustainability of a company's dividend ...
  84. How does goodwill increase a company's value?

    Learn about the basics of goodwill in the business world, what positive effects it can have on a company's overall value ...
  85. Are dividends the best way to make money for retirement?

    Using dividends for retirement income can provide a hedge against a variety of risks, but investors need to be aware of the ...
  86. What percentage of a diversified portfolio should be exposed to the forest products ...

    Learn some principles which should guide portfolio management and diversification, and how forest products can be part of ...
  87. How do I use the debt ratio to decide when to invest in a company?

    Understand the calculation and interpretation of the debt ratio and how this metric is used by investors to analyze a company's ...
  88. How do you the calculate Sharpe ratio in Excel?

    Learn how to use Microsoft Excel to calculate the Sharpe ratio, an investing tool useful for assessing the relationship between ...
  89. What is the difference between a sharpe ratio and an information ratio?

    Understand the meaning of the Sharpe ratio and the information ratio, and understand how they differ as tools for evaluating ...
  90. What is the difference between a Sharpe ratio and a Sortino ratio

    Understand the differences between the Sharpe ratio and the Sortino ratio, two risk-adjusted return on investment calculations, ...
  91. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ...
  92. What is the difference between gross profit margin and markup?

    Understand the distinction between gross profit margin and markup, and learn how each of these measures of profitability ...
  93. What is the difference between gross profit margin and contribution margin?

    Learn the difference between gross profit margin, an overall profitability metric analysts use, and contribution margin, ...
  94. Is book value a better metric for company worth than the PE ratio?

    Determine the best situations in which to utilize book value, P/E ratio and other metrics to determine the true worth of ...
  95. What is the difference between book value and carrying value

    Dig deeper into the definitions of carrying value and book value, and learn to differentiate between their various financial ...
  96. What is the difference between book value and salvage value

    Discover the difference between two valuations, the book value and the salvage value, and the respective purpose of each ...
  97. What is a good Sharpe ratio?

    Understand how the Sharpe ratio is calculated, and its significance and use for investors in evaluating the performance of ...
  98. What is the difference between gross profit margin and operating profit margin?

    Understand the difference between gross profit margin and operating profit margin, two measures of corporate profitability ...
  99. Harness Elliot Wave principles To Tap Market Trends

    We can apply three easily understood Elliott Wave principles to a popular breakout strategy and watch how they improve market ...
  100. How does Compound Interest Work?

    A quick way to understand the impact of compound interest is to ask yourself if you’d rather receive $100,000 a day for a ...
Frequently Asked Questions
  1. Who exactly needs to be paying attention to the time interest earned ratio of a company?

    See why creditors pay special attention to a firm's times interest earned ratio and how their interpretation impacts management ...
  2. What does a high times interest earned ratio signify with regard to a company's future?

    Learn how the times interest earned ratio affects the perception of solvency of a company, and what a high ratio can mean ...
  3. How do I implement a forex strategy when spotting a Stick Sandwich Pattern?

    Learn about the stick sandwich and how to use this reversal pattern in conjunction with other technical indicators to create ...
  4. How do traders and analyst create profitable Swing Trading strategies in forex?

    Learn how to create a profitable swing trading strategy in the forex market using price channels on bullish, bearish and ...
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