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This isn't every term in the stock market universe, we just wanted to put together a resource to explain some of the most common terms you might hear on CNBC.
Beta measures the volatility of a stock against the market as a whole. When we say volatility we are referencing the swings a company and/or market experience. Beta theoretically tells an investor how much risk they may experience when investing in an individual stock. A beta that is equal
The Earnings Yield is a measure of earnings per share (EPS) vs. share price. This ratio can assist investors in comparing returns between competitive companies. Growth companies will generally present low earnings yields while value companies represent the highest earnings yields. Earnings Yield = Earnings per Share / Stock Price
The Debt-to-Equity Ratio is a measure of leverage. It represents how much debt a company is taking on in order to run its operations as opposed to using its own funds. Debt to Equity Ratio = Total Liabilities / Total Shareholders' Equity This ratio indicates how risky an investment into a specific
Revenue per Share calculates the total revenue each share earned over a trailing twelve months (TTM). Revenue per share = Total Revenue / Average Shares Outstanding Revenue can help investors understand cyclical trends to better understand how a company is performing compared to a similar time frame in the past or against
Revenue per Employee looks at the average revenue each employee generates for the company. Revenue Per Employee = Revenue / Current Number of Employees Revenue per employee helps investors understand how productive and profitable an average employee is at a company.
Earnings per Share Growth represents how a stocks earnings have grown or declined over the previous 12 months. EPS Growth = (Current Year EPS - Previous Year EPS) / Previous Year EPS EPS growth rate helps investors understand if a company's earnings have grown or declined over the last year.