Key Financial Terms for Equity Investing
This guide is a working glossary of the financial terms that appear on every stock research page — explained as questions each one answers, not just formulas. It covers Market Capitalisation (and the large/mid/small-cap ranking convention), EPS (basic vs diluted), the P/E ratio (trailing vs forward, and why it’s only meaningful in comparison), the P/B ratio (most useful for asset-heavy businesses), ROE and ROCE (and why looking at both together matters more than either alone), the Debt-to-Equity ratio (and why “normal” varies by industry), Revenue/margins/Free Cash Flow, and 52-week high/low and Beta. The closing message: no single metric answers “is this a good investment?” — the real skill is noticing what each number doesn’t tell you, and checking the metric that fills that gap.