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
  • EBITDAEarnings 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