Glossary

The terms used across InspectStocks, in plain language, with how we measure each one.

Revenue: Everything a company billed its customers in a period, before any costs — the top line. For a bank we use net interest income plus non-interest income, because a lender’s fee revenue on its own is a small part of its business.
TTM (trailing twelve months): The last four reported quarters added together. It smooths out seasonality and is fresher than the last annual report. We publish a TTM figure only when all four quarters exist and join up: three quarters labelled as a year would make a company look smaller than it is. How the grade works →
Free cash flow: Operating cash flow minus capital expenditure: the cash a business generates after paying to maintain and grow its assets. Three of the five grade checks are built on it. How the grade works →
Operating cash flow: The cash that came in from running the business in a period, after paying suppliers, staff and taxes. Unlike net income, it is not moved by non-cash items such as depreciation or stock-based pay.
Capital expenditure (capex): Cash spent on long-lived assets — factories, equipment, data centres, software. Subtracted from operating cash flow to give free cash flow.
Net margin: Net income as a share of revenue: how much of each dollar of sales ends up as profit. Normal levels vary widely by industry — a grocer at 2% and a software company at 30% can both be healthy.
P/E ratio (price to earnings): The share price divided by earnings per share over the trailing twelve months: what the market pays today for each dollar of yearly profit. A company losing money has no P/E. Profitable, under 20x →
P/S ratio (price to sales): Market value divided by trailing revenue. Useful where earnings are small or negative, and silent on how much of that revenue becomes profit.
Free cash flow yield: Free cash flow divided by market value — the inverse of a price-to-cash-flow multiple. Higher means more cash generated for each dollar of the company bought. Free cash flow above 6% →
Market capitalisation: Share price times shares outstanding: what the market values the whole company at. We take the share count from the filing itself and correct it for companies whose US shares are depositary receipts.
Earnings per share (diluted): Net income divided by the average number of shares, counting options and convertible securities that could become shares. Restated for stock splits so that every year compares on one basis.
Dilution and buybacks: Dilution is a rising share count, which shrinks each shareholder’s slice. A buyback retires shares — but a company can spend billions on buybacks and still issue more shares than it retires, so we check the count itself. Share count actually shrinking →
Return on equity (ROE): Net income divided by shareholders’ equity. It rises with borrowing as well as with a better business, which is why banks are judged on return on assets instead.
Return on assets (ROA): Net income divided by total assets. For a bank, around 1% is the level the industry itself treats as earning well.
Book value per share: Shareholders’ equity divided by shares outstanding: what the accounts say each share owns. Book value per share growing is one of the five checks used for banks and insurers.
52-week high and low: The highest and lowest closing prices over the past year. How far a share sits below its 52-week high describes the price, not the business. A-graded, well off its high →
200-day moving average: The average closing price over the last 200 trading sessions. We state how far a price sits above it as a percentile of the stock’s own history, because 15% above is ordinary for one company and extreme for another.
Payout ratio: Dividends paid as a share of earnings. Above 100% a company is paying out more than it earned; property trusts routinely do, because they pay from cash flow rather than from accounting profit. Raising dividends five years+ →
10-K and 10-Q: The annual and quarterly reports every US-listed company files with the SEC — audited in the case of the 10-K, reviewed in the case of the 10-Q. Every figure on this site comes from filings like these.
20-F and 6-K: The annual report a foreign company listed in the US files instead of a 10-K, and the form it uses to furnish its quarterly results. Figures are often in the company’s own currency; we convert every period at one current exchange rate so growth is not an exchange-rate story.
8-K: A filing for a material event between reports — including the press release announcing quarterly results, which usually arrives days before the 10-Q.
XBRL: The machine-readable tagging SEC filings carry, labelling every figure with a standard concept. It is what lets thousands of companies’ statements be read without retyping them — and where most data errors begin.
13F: The quarterly list of US-listed stock holdings that every investment manager with discretion over at least $100 million of them must file, within 45 days of quarter end. Long positions only — no short positions and no cash. Fund managers →