Financials Definitions

Find out what each of the financial indicators in the Enhanced Company report mean.

Financials Indicators

P/E or Price to Earnings Ratio (calculated daily). The P/E industry expected range is 20 to 25. Scores outside this range may be acceptable, depending on the circumstances of the company. However, it is common to assess the P/E ratio in light of a company's circumstances. A higher or lower score may be appropriate.

EPS or Earnings Per Share. The EPS industry expectation is greater than 0. Typically, the higher is better, but extreme values may be misleading. Consider carefully how many shares are issued vs the earnings.

Operating Margin over 1 Year. The Operating Margin industry expectation is greater than 10%. Higher is better, but may mean the company is not spending wisely.

Net Profit Margin Percent. The net profit margin industry expectation is greater than 10%. Higher is better. 10% is a target minimum.

Operating Margin over Five Years. The five-year operating margin industry expectation is greater than 15%.

Current Ratio - The current ratio industry expectation is 1.5% to 3%. It is the company's ability to pay short term obligations.

Quick Ratio - The quick ration industry expectation is greater than 1%. It is the company's ability to meet its short term obligations from its most liquid assets.

ROI or Return on Investment. The ROI industry expectation is greater than 7%. Measures the profitability of the ocmpany compared to the cost to date.

ROE or Return on Equity. The ROE industry expectation is in the range of 15% to 30%. It measures the return on shareholder equity and measures financial success.

ROA or Return on assets. The ROA industry expectation is greater than 8%. Measure company's profit agians its total assets value.

Free Cash Flow. The free cash flow industry expectation is greater than 0. It is the amount of money a company has after all expenses.

Payout Ratio. The payout ratio industry expectation is less than 50%. It is the percentage of company income paid out to shareholders as dividends.

Revenue Change over 1 year. The revenue change over 1 year. The industry expectation is greater than 0%. Higher is better.

Book Price Per Share. The book price should be higher than the current share price. It is the book value of company shares not the share price that is being traded.

Dividend $. This is the dollar vlaue of the last dividend paid. The dividend industry expectation is greater than 0.

Dividend % over 1 year. The dividend % paid or dividend yield, over 1 year. THe industry expectation is greater than 2%.

Dividend Growth over 3 years. The dividend growth % over three years. The industry expectation is greater than 8%.

Dividend Average 5 years. The dividend average over five years. The industry expectation is greater than 5%.

Total Debt to Equity Long Term. The long-term debt compared to equity. Divide total long term liabilites by shareholder equity. The industry expectation is less than 35%.

Gross Margin %. The gross margin is the difference between revenue and the cost of goods sold. The industry is the expectation is greater than 50%.

Interest coverage %. The company's ability to cover its expenses from its revenue. The interest cover industry expectation is greater than 1.5%.

Total Debt to Equity Short Term. The short-term debt to equity. Divide total short term liabilites by shareholder equity. The industry expectation is between 2% and 2.5%.