Financial Metrics Glossary
Every ratio explained simply — formula, meaning and how to read it.
52
metrics explained
4
ways to read them
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Metric
Metric Explainer: Asset Turnover Ratio
How much revenue the company generates for every ₹1 of assets it owns. Higher means the company is using its assets more efficiently to generate sales. "Asse...
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Metric Explainer: Book Value Per Share
The accounting value of the company per share — what each share is "worth" on the balance sheet. "Book Value matlab company ki kitaabi value — saari property...
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Metric Explainer: Capital Expenditure (Capex)
Money spent on buying or upgrading factories, equipment, land, and other longterm assets — the investment to sustain and grow the business. "Capex matlab com...
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Metric Explainer: Capital Employed
Total money deployed in the business from all sources — shareholders' money plus longterm debt. It's the denominator in the ROCE calculation. "Capital Employ...
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Metric Explainer: Cash Conversion Cycle
Total time from paying for raw materials to collecting cash from customers — measures how quickly a company converts working capital into cash. "CCC batata h...
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Metric Explainer: Cash Flow from Operations (CFO)
Actual cash generated by the company's everyday business — more honest than profit because it counts real cash in and out, not accounting entries. "CFO matla...
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Metric Explainer: CFO Conversion Ratio
CFO Conversion measures what percentage of a company's reported profits actually converts into real cash. It's the earnings quality lie detector. "Profit dik...
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Metric Explainer: Current Ratio
Can the company cover its shortterm debts with its shortterm assets? A ratio above 1 means yes — the company has enough current assets to pay its current lia...
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Metric Explainer: Debt/Equity Ratio
D/E ratio measures how much debt a company uses relative to its own equity (shareholders' funds). It's the simplest measure of financial leverage. "D/E batat...
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Metric Explainer: Depreciation & Amortisation
A noncash expense that spreads the cost of buildings, machines, and equipment over their useful life — like "using up" an asset slowly on the books. "Depreci...
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Metric Explainer: Dividend Payout Ratio
What percentage of net profit is paid out as dividends to shareholders — the rest is retained for growth. "Dividend Payout batata hai ki company apne profit...
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Metric Explainer: Dividend Yield
How much dividend income you get for every ₹100 invested in the stock at the current market price. "Dividend Yield batata hai ki aapne jo share kharida, uspe...
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Metric Explainer: Operating Profit (EBIT)
What the business earns from operations after accounting for depreciation — but before interest and taxes. "EBIT matlab company ka actual operating profit —...
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Metric Explainer: EBITDA
How much money the core business operations generate, before accounting for depreciation, interest on loans, and taxes. "EBITDA batata hai ki company ka actu...
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Metric Explainer: EBITDA Margin
EBITDA Margin shows what percentage of revenue a company retains as operating earnings — before depreciation, interest, and taxes eat into it. It's the pures...
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Metric Explainer: Enterprise Value
The total value of a company including debt, minus cash — the theoretical "takeover price." What you'd pay to buy the entire business. "Enterprise Value matl...
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Metric Explainer: Earnings Per Share (EPS)
How much profit the company earns for each share. If EPS is ₹50, the company earned ₹50 profit for every share outstanding. "EPS matlab ek share ke peeche ki...
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Metric Explainer: EPS Growth Rate
How fast the company's earnings per share are growing year over year — the most direct driver of longterm stock price. "EPS Growth matlab company ka pershare...
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Metric Explainer: Shareholders' Equity
The total value that belongs to shareholders — what's left if you sell all assets and pay off all debts. It's the company's "net worth." "Shareholders' Equit...
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Metric Explainer: EV/EBITDA
A valuation metric that compares the total value of a company (including debt) to its operating earnings. More comprehensive than PE because it accounts for...
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Metric Explainer: Free Cash Flow (FCF)
FCF is the cash left over after a company has paid for its operations and invested in maintaining/growing its assets. It's the money truly available to share...
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Metric Explainer: Free Cash Flow Yield
How much free cash flow you get for every ₹100 invested at the current share price — the "real earnings yield" using cash, not accounting profit. "FCF Yield...
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Metric Explainer: Finance Costs (Interest Expense)
Interest paid on loans and borrowings — the cost of using other people's money. Higher debt = higher finance costs = less profit for shareholders. "Finance C...
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Metric Explainer: Fixed Asset Turnover
How much revenue the company generates from its factories, equipment, and other fixed assets — shows production efficiency and capacity utilisation. "Fixed A...
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Metric Explainer: GNPA & NNPA
GNPA (Gross NPA Ratio) = what percentage of a bank's total loans have gone bad. NNPA (Net NPA Ratio) = bad loans minus provisions already set aside — the unc...
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Metric Explainer: Gross Margin
What percentage of revenue is left after paying for direct production costs. Higher gross margin = more money available to cover operating expenses and gener...
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Metric Explainer: Gross Profit
Revenue minus the direct cost of producing goods or services — the profit before operating expenses, interest, and tax. "Gross Profit batata hai ki company n...
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Metric Explainer: Interest Coverage Ratio
How many times over the company can pay its interest expenses from operating profit. Higher is safer. "Interest Coverage batata hai ki company apna interest...
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Metric Explainer: Inventory Days
How many days goods sit in storage before being sold. Lower means the company sells its products faster. "Inventory Days batata hai ki company ka maal godown...
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Metric Explainer: Market Capitalisation
The total market value of all shares combined — how much the stock market thinks the entire company is worth. "Market Cap matlab stock market ke hisaab se pu...
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Metric Explainer: Net Debt
Total borrowings minus cash in the bank. If negative, the company has more cash than debt — a "net cash" position. "Net Debt matlab total karz minus cash. Ag...
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Metric Explainer: Net Debt to EBITDA
How many years of operating earnings it would take to repay all net debt. Lower means the company can pay off debt faster. "ND/EBITDA batata hai ki company k...
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Metric Explainer: Net Interest Margin (NIM)
NIM measures the spread between interest a bank earns on its loans and the interest it pays on its deposits/borrowings. It's the banking equivalent of gross...
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Metric Explainer: Net Profit Margin
What percentage of every rupee of revenue ends up as actual profit for shareholders — the ultimate profitability metric. "Net Margin batata hai ki company ke...
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Metric Explainer: Other Income
Income that does not come from the main business — interest earned on deposits, dividend income from investments, profit on selling assets or investments. "O...
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Metric Explainer: Profit After Tax (PAT)
The final profit left for shareholders after paying all expenses — operating costs, depreciation, interest on loans, and income tax. "PAT matlab company ka s...
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Metric Explainer: Payable Days (Creditor Days)
How many days the company takes to pay its suppliers. Longer payable days mean the company holds on to cash longer — but too long can strain supplier relatio...
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Metric Explainer: Price-to-Book Ratio (PB)
How much the market values the company compared to its accounting (book) value. PB of 3 means the market values each ₹1 of book value at ₹3. "PB Ratio batata...
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Metric Explainer: Price-to-Earnings Ratio (PE)
How much investors are willing to pay for ₹1 of the company's earnings. A PE of 30 means the market pays ₹30 for every ₹1 of annual profit. "PE Ratio matlab...
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Metric Explainer: PEG Ratio
PE ratio adjusted for growth. A PEG of 1 means the PE equals the earnings growth rate — considered "fair value" by growth investors. "PEG batata hai ki PE ki...
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Metric Explainer: Property, Plant & Equipment (PPE)
Physical assets the company owns — factories, land, buildings, machinery, vehicles. The backbone of manufacturing and infrastructure businesses. "PPE matlab...
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Metric Explainer: Promoter Holding
The percentage of shares owned by the founding family or controlling group — "skin in the game." "Promoter Holding batata hai ki company ke maalik ka kitna p...
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Metric Explainer: Promoter Pledge
Shares that the promoter has used as collateral for a personal loan. If the stock price falls, these shares can be forcesold by the lender — creating a casca...
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Metric Explainer: Quick Ratio (Acid Test)
Like the Current Ratio but excludes inventory — can the company pay its shortterm bills without selling inventory? "Quick Ratio matlab agar company ko kal sa...
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Metric Explainer: Receivable Days (Debtor Days)
On average, how many days it takes for the company to collect payment from customers after a sale is made. "Receivable Days batata hai ki bikri ke baad paisa...
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Metric Explainer: Revenue from Operations
The total money a company earns from selling its products or services — the top line of the Profit & Loss statement. "Revenue matlab company ne apne products...
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Metric Explainer: Revenue Growth
How much the company's revenue increased compared to the previous year, expressed as a percentage. "Revenue Growth batata hai ki pichle saal ke muqable mein...
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Metric Explainer: ROCE (Return on Capital Employed)
ROCE measures how much operating profit a company generates for every rupee of total capital (debt + equity) invested in the business. "ROCE batata hai ki co...
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Metric Explainer: ROE (Return on Equity)
ROE measures how much net profit a company earns for every rupee of shareholder equity. It tells equity investors specifically how well their money is being...
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Metric Explainer: Effective Tax Rate
What percentage of profit the company actually pays as income tax — this may differ from the statutory rate due to exemptions, deductions, and deferred tax....
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Metric Explainer: Total Assets
Everything the company owns — from factories and equipment to cash in the bank, inventory in warehouses, and money owed by customers. "Total Assets matlab co...
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Metric Explainer: Working Capital Days
Working capital days measure how long a company's cash is tied up in daily operations — in inventory waiting to be sold, in receivables waiting to be collect...