EV/Capital Employed Ratio
What is the EV/Capital Employed Ratio? EV/Capital Employed Ratio is a measure of enterprise value normalized by the level of capital used by the business. For example, a large business with a large capital stock is bound to realize a large enterprise value solely due to its large capital holdings. What Does the Numerator (ROCE)...
Earnings Yield
What is Earnings Yield? The earnings yield is a financial ratio that describes the relationship of a company’s LTM earnings per share to the company’s stock price per share. The earnings yield is the inverse ratio to the price-to-earnings (P/E) ratio. The quick formula for Earnings Yield is E/P, earnings divided by price. The yield...
EV/EBIT Ratio
What is the EV/EBIT Ratio? The enterprise value to earnings before interest and taxes (EV/EBIT) ratio is a metric used to determine if a stock is priced too high or too low in relation to similar stocks and the market as a whole. The EV/EBIT ratio is similar to the price to earnings (P/E) ratio;...
Conglomerate Discount
What is a Conglomerate Discount? Conglomerate discount isn’t what its name may suggest. It’s a drawback for a conglomerate with multiple sections/divisions/companies, all of which aren’t generally successfully run as a cohesive unit. As a result, the market may discount the value of a multi-division corporation, giving less value to its earnings. Calculating the Conglomerate...
Momentum Indicators
What are Momentum Indicators? Momentum indicators are tools utilized by traders to get a better understanding of the speed or rate at which the price of a security changes. Momentum indicators are best used with other indicators and tools because they don’t work to identify the direction of movement, only the timeframe in which the...
