Investing Terminology & Acronyms
This page is for defining some of the most common investing terms I use in my posts. A good resource for learning more about these terms is Investopedia
- CAGR – Compound Annual Growth Rate – the rate of return that would be required for an investment to grow from its beginning balance to its ending balance
- CFO – Cash From Operations – the amount of money a company brings in from its ongoing, regular business activities
- DCA – Dollar Cost Averaging – to invest a set amount of money at periodic intervals regardless of the asset’s price
- DD – Due Diligence
- EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization – Measure of profitability. Shows earnings before the influence of accounting and financial deductions
- EPS – Earnings per Share – a company’s profit divided by the outstanding shares of its common stock
- FCF – Free Cash Flow – the cash a company generates after taking into consideration cash outflows that support its operations and maintain its capital assets
- M&A – Mergers and acquisitions
- MD&A – Management discussion and analysis – a section of a company’s 10-K or 10-Q for executives to analyze the company’s performance
- P/E – Price to Earnings ratio – measures a company’s current share price relative to its earnings per share (EPS)
- Payout Ratio – the percentage of earnings or cash flow paid out in dividends
- YOC – Yield on Cost – calculated by dividing a stock’s current dividend by the price initially paid for that stock
- YOY – Year Over Year – used when compare two events on an annualized basis
- YTD – Year to Date
- 10-Q – A company’s quarterly SEC filing
- 10-K – A company’s annual SEC filing