Financial Theory Articles

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  1. The Top 3 Exxon Mobil Shareholders

    Learn about the three largest individual shareholders of Exxon Mobil stock, Rex Tillerson, and the largest institutional ...
  2. The Top 4 Starbucks Shareholders (SBUX)

    Howard Schultz may have stepped down as CEO, but he remains one of the coffee juggernaut's largest shareholders--for now. ...
  3. The Top 3 American Airlines Shareholders (AAL)

    Find out about the major individual, institutional and mutual fund shareholders of American Airlines Group Inc.
  4. The Top 3 Netflix Shareholders (NFLX)

    Discover the top three owners of Netflix shares, and learn how the 30-person startup grew into a global streaming network ...
  5. The Top Tesla Shareholders

    Discover the largest single shareholders of Tesla Motors, and learn about their backgrounds and how much their shares are ...
  6. Income, Value and Growth Stocks

    Investors who buy stocks generally seek one of three criteria: undervalued holdings, growth potential or steady income.
  7. Low-Risk vs. High-Risk Investments for Beginners

    Understanding risk is key to better investing. Determining where risk lies and knowing the difference between low risk and ...
  8. Comparing P/E Ratio, EPS and Earnings Yield

    P/E ratios may be the established standard for valuation, but earnings yields are especially useful for comparing returns ...
  9. Analyzing a bank's financial statements

    In this article, you'll get an overview of how to analyze a bank's financial statements and the key areas of focus for investors ...
  10. 5 must-have metrics for value investors

    In this article, we outline the five ratios that can help value investors find the most undervalued stocks in the market.
  11. How to Analyze a Company's Financial Position

    Find out how to calculate important ratios and compare them to market value.
  12. The Top 4 J.C. Penney Shareholders

    Discover J.C. Penney 's top four individual shareholders.
  13. Why Do Companies Care About Their Stock Prices?

    A company's stock price reflects the company's earnings potential, its future viability, determines management compensation ...
  14. The Top 4 General Electric Shareholders (GE)

    Here are the top shareholders of General Electric.
  15. Reading the Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  16. Testing 3 Types of Analysts

    Which type of analyst fits your needs? Different clients require different research reports. Find out here which analyst ...
  17. How inflation and unemployment are related

    How can inflation affect unemployment, and vice versa? Here, we examine the relationship between wage inflation, consumer ...
  18. The Top 4 Yelp Shareholders (YELP)

    Read about the top major direct holders of Yelp Inc., and learn about the backgrounds of these shareholders and the numbers ...
  19. Understanding financial liquidity

    Financial liquidity comes into play for companies, your personal finances, investing, and the financial markets. However, ...
  20. The difference between finance and economics

    Learn the differences between these closely related disciplines and how they inform and influence each other.
  21. Celgene's 3 Key Financial Ratios (CELG)

    Learn about Celgene Corporation and its key financial ratios, such as the debt-to-equity (D/E) ratio, operating margin and ...
  22. Analyze cash flow the easy way

    Learn the key components of the cash flow statement, how to analyze and interpret changes in cash, and what improved free ...
  23. How to choose the best stock valuation method

    There are many valuation methods available to investors, each with unique characteristics. Here, we'll explore the most common ...
  24. Methods used in valuing private companies

    There are a few methods for calculating the valuation of a private company. By using financial information from peer groups, ...
  25. The Top 3 Chevron Shareholders

    Learn about the major shareholders, including individuals, institutional investors and mutual funds, of Chevron Corporation ...
  26. Calculating volatility: A simplified approach

    Though most investors use standard deviation to determine volatility, there's an easier and more accurate way of doing it: ...
  27. Calculating covariance for stocks

    Covariance can help you calculate how two stocks might move together and help you in building a diversified investment portfolio.
  28. Internal rate of return: An inside look

    The internal rate of return can be used to measure an compare capital projects, stock buyback programs, and investments to ...
  29. How to calculate your investment return

    How much are your investments actually returning? The method of calculation can make a significant difference in your true ...
  30. How to calculate required rate of return

    The required rate of return is used by investors and corporate-finance professionals to evaluate investments. In this article, ...
  31. 12 things you need to know about financial statements

    Before investing, discover 12 characteristics of financial statements that can help you evaluate companies and increase your ...
  32. How To Use The P/E Ratio And PEG To Tell A Stock's Future

    The P/E ratio is used to calculate stock price valuation. However the PEG ratio includes earnings growth and can provide ...
  33. Understanding Rights Issues

    It's important to know why a company is offering a rights issue, what the capital will be used for, and the options available ...
  34. Market value versus book value

    Understanding book value and market value is helpful in determining a stock's valuation and how the market views a company's ...
  35. How to calculate the ROI on a rental property

    The return on a real estate investment can vary greatly, depending on how the property is financed, the rental income, and ...
  36. The Top General Motors Shareholders (GM)

    Discover General Motors’ top three direct shareholders. Learn about how many shares they hold and obtain a brief description ...
  37. Key Financial Ratios for Restaurant Companies

    These 7 financial ratios provide insight into the profitability of a restaurant, prospective longevity of the business and ...
  38. Starbucks as an example of the value chain model

    Management consulting guru Michael Porter developed the value chain model in 1985; here's how it works, using a well-known ...
  39. Are stocks with low P/E ratios always better?

    Is a stock with a lower P/E ratio always a better investment than a stock with a higher one? The short answer is no. The ...
  40. Don’t let stock prices fool you

    Find out why a stock with a six-figure share price can still be a good value.
  41. Dividend facts you may not know

    Discover the issues that complicate these payouts for investors.
  42. The 4 basic elements of stock value

    Investors use these four measures to determine a stock's worth. Find out how to use them.
  43. Learn simple and compound interest

    Interest is defined as the cost of borrowing money or the rate paid on a deposit to an investor. Interest can be classified ...
  44. FYI on ROI: A guide to calculating return on investment

    Return on investment (ROI) measures how successful an investment is performing. In this article, we'll show you how to calculate ...
  45. How an IPO is valued

    The initial valuation of an IPO can determine the success or failure of a specific stock – but how is that price determined? ...
  46. Top 8 Ways Companies Cook the Books

    Find out more about the fraudulent accounting methods some companies use to fool investors.
  47. What Is a Cash Flow Statement?

    The Cash Flow Statement measures whether a company generates enough cash to meet its operating expenses.
  48. 10 Common Finance Terms Every Newbie Needs To Know

    In order to get a better understanding of what you read in markets news, we’ll briefly explore the terms you commonly encounter.
  49. The Basics Of Business Forecasting

    Discover the methods behind financial forecasts and the risks inherent when we seek to predict the future.
  50. The 5 Types Of Earnings Per Share

    A look at the five varieties of Earnings Per Share (EPS) and what each represents can help an investor determine whether ...
  51. Evaluating the board of directors

    Corporate structure can tell you a lot about a company's potential. Learn more here.
  52. Impairment charges: The good, the bad, and the ugly

    An impairment charge is a term used to describe writing off worthless goodwill. But you need to know what its potential impact ...
  53. How ROA and ROE give clear picture of corporate health

    Both measure performance, but sometimes they tell a very different story. This is why they’re best used together.
  54. Top 3 Pitfalls Of Discounted Cash Flow Analysis

    The Discounted Cash Flow (DCF) method can be difficult to apply to real-life valuations. Find out where it comes up short. ...
  55. How to use gross national product as an indicator

    Learn what the GNP truly represents, and how its misuse can manipulate the facts.
  56. Find the right fit with probability distributions

    Discover a few of the most popular probability distributions and how to calculate them.
  57. How influential economists changed our history

    Find out how these five groundbreaking thinkers made contributions to financial theory that crossed over into many aspects ...
  58. Understanding Capital And Financial Accounts In The Balance Of Payments

    The current, capital and financial accounts compose a nation's balance of payments, indicating the state of its economy and ...
  59. An Introduction To Small Cap Stocks

    When it comes to a company's size, bigger isn't always better for investors. Here is an introduction to small cap stocks.
  60. EBITDA: A clear look

    This measure has its benefits, but it can also present earnings through rose-colored glasses.
  61. Corporate cash flow: Understanding the essentials

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
  62. Gauging the impact of combining GAAP and IFRS

    The convergence of accounting standards is changing the attitudes of CPAs and CFOs toward harmonization of international ...
  63. Biggest merger and acquisition disasters

    Find out which companies have collapsed after merging.
  64. The Dirt On Delisted Stocks

    Listed securities are "the cream of the crop." Find out how a firm can lose that status and why you should be wary.
  65. Hypothesis testing in finance: Concept and examples

    When you're indecisive about an investment, the best way to keep a cool head might be test various hypotheses using the most ...
  66. Spotting companies in financial distress

    What are the warning signs that a company is struggling – or worse, sinking – financially? Read on to find out.
  67. Calculating The Equity Risk Premium

    See the model in action with real data and evaluate whether its assumptions are valid. Here is how to calculate the equity ...
  68. Mergers and acquisitions: Understanding takeovers

    In the language of mergers and acqusitions, battleground terms meld with bizarre metaphors to create a unique vocabulary.
  69. The Pitfalls of Porter's 5 Forces

    Porter's five forces are a staple of business schools everywhere, but there are some common pitfalls you should watch out ...
  70. Understanding Japanese Keiretsu

    The structure of major companies in Japan is steeped in tradition and relationships.
  71. How to value companies with negative earnings

    For some investors, the possibility of stumbling upon a small biotech with a potential blockbuster drug, or a junior miner ...
  72. Evaluating Executive Compensation

    Learn about the different types of CEO compensation, where you can find this information, and how it can affect your investments. ...
  73. The importance of knowing your net worth

    It is vital that you track your net worth (the difference between what you own and what you owe), no matter what your age.
  74. Cash flow statement: Analyzing cash flow from financing activities

    The financing activity in the cash flow statement measures the flow of cash between a firm and its owners and creditors.
  75. The impact of share repurchases

    Share repurchases can have a significant positive impact on an investor’s portfolio and are a great way to build investor ...
  76. Cash flow statement: Analyzing cash flow from investing activities

    Here, you'll find an overview of cash flow from investing activities — one of three primary categories in the statement of ...
  77. How to calculate goodwill

    Goodwill is an intangible, but it is still possible to effectively calculate or estimate it for a company.
  78. How mergers and acquisitions can affect a company

    M&A can have a profound effect on a company’s growth prospects and outlook, but with a significant degree of risk.
  79. Stochastics: An accurate buy and sell indicator

    Find out how stochastics are used to create buy and sell signals for traders.
  80. Market reversals and how to spot them

    The sushi-roll indicator may help lower the risk of trying to pick market tops and bottoms.
  81. Momentum and the Relative Strength Index

    These two indicators can give the trader a better understanding of when to get in and out of an issue.
  82. Profiting from the Bollinger Squeeze

    Learn how Bollinger's "squeeze" can help you determine breakout direction.
  83. How to use the dividend capture strategy

    Learn how to implement the dividend capture strategy, an aggressive, income-focused stock trading strategy investors can ...
  84. Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and ...
  85. Using The Price-To-Book Ratio To Evaluate Companies

    The Price-To-Book (P/B) ratio can be an easy way to determine a company's value, but it isn't magic!
  86. International Financial Reporting Standards

    Learn about the purpose of the IFRS, as well as its benefits, goals, and fundamental difference from the U.S. GAAP.
  87. Discount Broker

    A discount broker is a stockbroker who carries out "buy" and "sell" orders at a reduced commission compared to a full-service ...
  88. The importance of other comprehensive income

    Understanding and analyzing OCI greatly improves financial analysis, especially for financial companies.
  89. Hamburger Economics: The Big Mac Index

    In theory, PPP stands up much better than it does in reality. Find out how to evaluate currencies according to the price ...
  90. Cash flow statements: Reviewing cash flow from operations

    Discover why cash flow from operating activities is significant to businesses, and learn the direct and indirect methods ...
  91. The basics of a financial analysis report

    An overview of the major sections to consider when writing a financial analysis report on a company.
  92. Free cash flow yield: The best fundamental indicator

    Cash in the bank is what every company strives to achieve. Find out how to determine how much a company is generating and ...
  93. Understanding profit metrics: Gross, operating and net profits

    Rather than relying solely on a company's net profit figures, seasoned investors will often look at gross profit and operating ...
  94. How Risk Free Is the Risk-Free Rate of Return?

    This rate is rarely questioned—unless the economy falls into disarray.
  95. Equity valuation: The comparables approach

    The main purpose of equity valuation is to estimate a value for a firm or security. The comparable model is a relative valuation ...
  96. Explaining amortization in the balance sheet

    Read to find out more about amortization, an important way to account for the value of intangible assets.
  97. Goodwill versus other intangible assets: What's the difference?

    "Intangible" assets don't possess physical substance. Yet they are quantifiable, and of great importance to any business.
  98. Understanding analyst ratings

    Discover whether analyst recommendations are really worth listening to.
  99. Lognormal and normal distribution

    When and why do you use lognormal distribution or normal distribution for analyzing securities? Lognormal for stocks, normal ...
  100. Compound Annual Growth Rate: What You Should Know

    The Compound Annual Growth Rate, known as CAGR, is a good and valuable tool to evaluate investment returns, however it does ...
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Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
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