Every term that ever made you nod along

Profit before the four things that make companies look different from one another.

The cash actually left over after the business has paid to keep itself alive.

Cash generated by the actual day-to-day business, before investment and financing.

Money spent on physical assets: factories, machines, servers, vehicles.

What is left of each pound of sales after the direct cost of making the thing.

Profit from the core business, as a share of sales, before interest and tax.

The bottom line, as a percentage of sales.

Net profit divided by the number of shares, which is your slice of it.

Spreading the cost of a physical asset over the years it is used.

Depreciation, but for intangible assets like patents and software.

How many years of current profit you are paying for the shares.

The P/E using next year's forecast earnings instead of last year's actual ones.

The P/E adjusted for how fast earnings are growing.

The share price against the accounting value of the company's net assets.

Market value against revenue. Used when there are no profits to divide by.

What it would really cost to buy the whole company, debt included.

Enterprise value against operating earnings. The takeover world's favourite multiple.

The total value the market puts on all a company's shares.

The blended rate a company must beat to be worth anything.

Valuing a business as the sum of all the cash it will ever produce, in today's money.

The bit of a DCF that represents everything beyond the forecast horizon.

The cash tied up in running the business day to day.

Assets minus liabilities: what the accounts say shareholders own.

Book value with goodwill and intangibles stripped out.

The premium a company paid over the fair value of what it bought.

Whether a company can cover the next twelve months from short-term resources.

The current ratio, but excluding inventory, which might not sell.

Whether you can meet your bills right now.

Whether the company can survive in the long run, given what it owes.

How much of the business is funded by lenders rather than owners.

How many times over the company's profits could pay its interest bill.

How much profit the company generates on the money shareholders have in it.

The return on all the money in the business, borrowed and owned alike.

How much a stock moves relative to the market as a whole.

Return above what you would expect for the risk you took.

How much a price swings about. Not the same thing as risk.

The statistical measure behind volatility: how far returns typically stray from average.

Return earned per unit of volatility endured.

The fall from a peak to the following trough. The pain, measured.

The degree to which two things move together, from −1 to +1.

Owning things that do not move together, so that no single failure ruins you.

The risk of the whole market, which no amount of diversification removes.

Annual dividend as a percentage of the share price.

The share of profit handed out as dividends.

How many times over the company's earnings could pay the dividend.

The company buying its own shares and cancelling them.

Your slice shrinking because the company issued more shares.

Betting a price will fall, by selling shares you have borrowed.

A price spike caused by short sellers being forced to buy back at once.

Your broker demanding more money, at the worst possible moment.

Using borrowed money to increase the size of your position.

The gap between what buyers offer and sellers demand. Your invisible cost.

An instruction to trade only at a price you specify, or better.

A contract whose value is derived from something else.

The right, but not the obligation, to buy or sell at a set price.

A binding agreement to buy or sell something at a set price on a set date.

A position taken to offset a risk you already have.

A basket of assets you can buy as a single share.

A fund that simply buys everything in an index, and does not try to be clever.

The annual fee a fund charges, as a percentage of your money.

A loan to a company or government, traded like a security.

How much a bond's price will move when interest rates change.

An agency's opinion on how likely a borrower is to default.

A bond from a borrower the agencies think might not pay you back.

Returns earning returns. The engine of every long-term outcome.

The smooth annual rate that would have produced your actual result.

The general rise in prices, which quietly shrinks the value of cash.

Your return after inflation. The only one that buys anything.

Interest rates plotted against how long you lend for.

The first time a company sells shares to the public.

The window after an IPO in which insiders are forbidden from selling.

The quarterly disclosure that reveals what big US funds own.

Company officers buying or selling their own shares, disclosed by law.

Sustained rises and falls, conventionally marked at 20%.

A meaningful, broad contraction in economic activity.

Whatever stops competitors from competing away a company's profits.

Buying a business for meaningfully less than you think it is worth.

Paying a high price today for a much larger business tomorrow.

The claim that prices already reflect everything that is known.

How you split money between shares, bonds, cash and everything else.

Selling what has grown and buying what has not, to restore your target mix.