Fundamentals

Fracking Can't Happen Without These Companies
With all the attention paid to fracking, what is are the good investment opportunities? Are the companies that extract oil ... 
How Fracking Affects Natural Gas Prices
Whatever you think of fracking, it has done one thing: kept the price of natural gas from increasing any more than it has. 
Using Home Equity Loans For Debt Consolidation
A home equity loan or line of credit is a convenient way to consolidate debts, cut your interest rate and gain a tax deduction. ... 
Why You Should Invest In This Vibrant Asian Nation
Other than tourism and a recent military coup, what's there for investors to know about Thailand? Plenty. 
4 Leverage Ratios Used In Evaluating Energy Firms
These four leverage ratios can help investors understand how oil and gas firms are managing their debt. 
Operating Profit
Operating profit is the profit generated from the core business of a company before accounting for interest and taxes. 
What does a high inventory turnover tell investors about a company?
Inventory turnover is an important metric for evaluating how efficiently a firm turns its inventory into sales. 
Why is it sometimes better to use an average inventory figure when calculating the ...
For a couple of key reasons, average inventory can be a better and more accurate measure when calculating the inventory turnover ... 
How do you calculate working capital?
The formula for calculating working capital is straightforward, but lends great insight into the shorterterm health of a ... 
How do changes in working capital affect a company's cash flow?
Working capital represents the difference between a firm's current assets and current liabilities. 
How do you calculate return on equity (ROE)?
Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... 
What are the main differences between return on equity (ROE) and return on assets ...
Return on equity (ROE) and return on assets (ROA) are two of the most important measures for evaluating how effectively a ... 
What are the main differences between compound annual growth rate (CAGR) and internal ...
The compound annual growth rate (CAGR), measures the return on an investment over a certain period of time. The internal ... 
Are companies with a negative return on equity (ROE) always a bad investment?
Any metric that uses net income is basically nullified as an input when a company reports negative profits. Return on equity ... 
How do I calculate the inventory turnover ratio?
The inventory turnover ratio is a key measure for evaluating how efficient management is at managing company inventory and ... 
Why is return on investment (ROI) a bad measure for calculating longterm investments?
Return on investment (ROI) is a useful valuation tool, but it lacks meaning for longterm investments. 
What factors go into calculating social return on investment (SROI)?
Find out how investors and companies are calculating the social return on investment (SROI), which evaluates both the financial ... 
How do I calculate the P/E ratio of a company?
Find out how to calculate this common valuation ratio and what the results can tell you about a company's performance. 
How can the pricetoearnings (P/E) ratio mislead investors?
A low P/E ratio doesn't automatically mean a stock is undervalued, just like a high P/E ratio doesn't necessarily mean it ... 
How can return on investment (ROI) calculations be manipulated?
Check out an example of how the return on investment (ROI) for similar investments can vary greatly, depending on how the ... 
Is there value in comparing companies from different sectors by using the debttoequity ...
Find out why using the debttoequity ratio for reviewing companies doesn't always make for an applestoapples comparison. 
What is the formula for calculating earnings per share (EPS)?
Learn why earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s ... 
How do interest rates affect the weighted average cost of capital (WACC) calculation?
The interest rate is one of many external factors that can change the inputs in the weighted average cost of capital (WACC) ... 
Day Trading: Impoverishing Dilettantes Since 1990
Operating a daytrading account is like owning thoroughbreds or an America’s Cup team. You can't just enter the arena with ... 
What is considered a high debttoequity ratio and what does it say about the company?
Learn how to make sense of the debttoequity numbers of a company when looking for good investment opportunities. 
What are the best uses for trailing EPS, current EPS and forward EPS?
The earnings per share (EPS) indicator has three basic types that can alert you to past, present and future health of a company. 
How can the current ratio be misinterpreted by investors?
Statistics can be misleading, and numbers on the balance sheet are no exception. Find out how the current ratio can confuse ... 
What's the difference between weighted average cost of capital (WACC) and internal ...
Both weighted average cost of capital (WACC) and internal rate of return (IRR) are great measures for assessing value, but ... 
What are the main differences between the current ratio and the quick ratio?
Find out how the quick ratio and the current ratio can offer different views on a company's ability to pay off liabilities. 
Why is earnings per share (EPS) also known as “The Bottom Line”?
"The bottom line" is a cliche is many aspects, but in finance the expression usually refers to a specific financial calculation: ... 
Cost of Debt
Cost of debt is the rate, expressed as a percentage, that a company pays on its borrowings. 
Solvency Ratio
The Solvency Ratio is one of many ratios used to measure a company's ability to pay its debts. Generally, the higher the ... 
EBIT (Earnings Before Interest and Taxes)
Earnings before interest and taxes, or EBIT, takes a company’s revenue, or earnings, and subtracts its cost of goods sold ... 
Fundamental Investment Metrics For Buying Stocks And Bonds
Don't let the name fool you. Even a "fundamental" investor has to pay attention to certain metrics. 
For Individual Investors, These May Be The Best Of Times
The raging debate on high frequency trading may lead the average retail investor to think that he/she continues to get a ... 
The Most Accurate Way To Gauge Returns: The Compound Annual Growth Rate
The compound annual growth rate, or CAGR for short, represents one of the most accurate ways to calculate and determine returns ... 
Sinking Fund
A sinking fund is a way for companies to pay off part of their bond issue before it reaches maturity. By eliminating its ... 
The 4 R's Of Investing In Retail
In retail, successfully managing return on investment (ROI) and other financial indicators is the key to a healthy business. ... 
The DebtService Coverage Ratio (DSCR)
The DebtService Coverage Ratio (DSCR) is a simple way to analyze whether a company can adequately manage its borrowing costs. ... 
The Operating Leverage And DOL
Operating leverage tells investors about the relationship between a company's fixed and variable costs. The higher a company's ... 
Reading The Inventory Turnover
Inventory turnover is a ratio that shows how quickly a company uses up its supply of goods over a given time frame. Inventory ... 
The Return On Invested Capital (ROIC)
Return on Invested Capital, or ROIC, is a fundamental method of determining a company's financial performance. It is used ... 
Assess Shareholder Wealth With EPS
Find out if management is doing its job of creating profit for investors. 
Understanding The Cash Conversion Cycle
Find out how a simple calculation can help you uncover the most efficient companies. 
Dividend Ratios: Payout And Retention
The dividend payout ratio and retention ratio measure how much profit a company gives back to shareholders as dividends. ... 
Financial Markets: Random, Cyclical Or Both?
Are the markets random or cyclical? It depends on who you ask. Here, we go over both sides of the argument. 
Cash Flow Statement: Analyzing Cash Flow From Financing Activities
The financing activity in the cash flow statement measures the flow of cash between a firm and its owners and creditors. 
Comparing The P/E, EPS And Earnings Yield
P/E may be the established standard for valuation purposes, but the earnings yield is especially useful for comparing potential ... 
Cash Flow Statement: Analyzing Cash Flow From Investing Activities
Reviewing investment activity is one of the most important exercises an individual can do to see how efficiently a company's ... 
The Optimal Use Of Financial Leverage In A Corporate Capital Structure
The amount of debt and equity that makes up a company's capital structure has many risk and return implications.
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5 Ways To Make Your Home Remodels Pay Off
Here are five ways to make your home renovation worth the money and effort you put into it. 
Differences Between Private Foundations And Public Charities
Here's a look at the differences between these types of charitable organizations. 
How To Monetize Your YouTube Channel
YouTube's Partner Program helps users earn money through their channels. Find out how. 
The World's Most Valuable Private Companies
In spite of the rewards going public can bring, some companies prefer to remain private, and they are very successful in this. 
Is Cyber Monday The New Black Friday?
Cyber Monday is becoming more popular than Black Friday. Here's why.
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