Search and learn about financial and technical indicators for trading analysis.
Measures the net amount of cash moving into and out of a business. It reveals how a company generates and uses cash across operations, investments, and financing, providing a truer picture of health than net income alone.
| Type | Positive Interpretation | Negative Interpretation |
|---|---|---|
| Operating | Core business is profitable | Operations are losing cash |
| Investing | Selling assets to raise cash | Investing heavily in future growth |
| Financing | Raising capital (debt/equity) | Repaying debt, buying back stock |
| Free Cash Flow | Surplus cash after investments | Not enough cash to cover expenses |
A momentum indicator that shows whether a stock is overbought or oversold relative to its recent high-low range. It helps traders identify potential reversal points.
| %R Value | Interpretation |
|---|---|
| 0 to -20 | Overbought – potential price pullback |
| -20 to -80 | Neutral zone – trend continuation likely |
| -80 to -100 | Oversold – potential price rebound |
A key liquidity metric that assesses a company's ability to cover its short-term obligations (due within one year) with its short-term assets. It answers the question: 'Can the company pay its immediate bills?'
Formula: Current Assets / Current Liabilities
| Value | Interpretation |
|---|---|
| < 1.0 | Potential liquidity risk; liabilities exceed assets |
| 1.0 – 2.0 | Healthy liquidity; good short-term financial health |
| > 2.0 | Very safe, but may indicate inefficient use of assets |
Quantifies a company's financial leverage by comparing its total liabilities to its shareholder equity. It indicates how much of the company's financing comes from debt versus equity, highlighting its reliance on borrowing.
Formula: Total Liabilities / Shareholder Equity
| D/E Ratio | Interpretation |
|---|---|
| < 1.0 | Low leverage; primarily equity-funded |
| 1.0 – 2.0 | Moderate leverage; balanced financing |
| > 2.0 | High leverage; higher financial risk |
Shows how much a company pays in dividends each year relative to its stock price. It's a key measure of the return an investor can expect from dividends alone, often favored by income-focused investors.
Formula: (Annual Dividend per Share / Stock Price) × 100
| Yield % | Interpretation |
|---|---|
| < 2% | Likely a growth-focused company, reinvesting profits |
| 2–5% | Balanced approach to growth and shareholder returns |
| > 5% | High yield, potentially an income stock or a sign of risk |
Stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a proxy for a company's core operational profitability before accounting and financing decisions are factored in.
| Trend | Interpretation |
|---|---|
| Consistently Growing | Strong and improving core business performance |
| Declining or Volatile | Weakening operational profitability or instability |
Compares a company's Enterprise Value (EV) to its EBITDA. This valuation multiple is often preferred over P/E as it's capital structure-neutral, making it useful for comparing companies with different levels of debt.
| Ratio | Interpretation |
|---|---|
| < 10 | Potentially undervalued or in a mature industry |
| 10–15 | Considered a fair valuation for many industries |
| > 15 | Potentially overvalued or a high-growth company |
The Price-to-Sales ratio compares a company's market capitalization to its total revenue. It’s particularly useful for valuing growth companies that may not yet be profitable.
| Ratio | Interpretation |
|---|---|
| < 1 | Potentially undervalued if sales are strong |
| 1–3 | A common range for fairly valued, established companies |
| > 3 | High valuation; significant future growth is priced in |
A momentum indicator that incorporates both price and volume to measure buying and selling pressure. It is often referred to as the volume-weighted RSI, helping to identify overbought or oversold conditions.
| MFI Value | Interpretation |
|---|---|
| < 20 | Oversold conditions; potential buying opportunity |
| 20–80 | Neutral market sentiment |
| > 80 | Overbought conditions; potential selling opportunity |
Measures how much profit a company makes on a dollar of sales, after paying for variable costs of production but before paying interest or tax. It reveals the efficiency of a company's core business operations.
| Margin % | Interpretation |
|---|---|
| High & Stable | Strong operational efficiency and pricing power |
| Low or Declining | Cost pressures or weakening competitive position |
The Price-to-Earnings ratio compares a company's stock price to its earnings per share. It's a classic valuation metric indicating how much investors are willing to pay for each dollar of earnings.
Formula: Stock Price / Earnings per Share (EPS)
| P/E | Interpretation |
|---|---|
| < 15 | Often considered a 'value' stock |
| 15–25 | Average valuation for the broader market |
| > 25 | Indicates high growth expectations or 'growth' stock |
The Price-to-Book ratio compares a company's market capitalization to its book value (assets minus liabilities). A low ratio could mean the stock is undervalued, especially for asset-heavy industries.
Formula: Market Cap / Book Value (or Stock Price / Book Value per Share)
| PB | Interpretation |
|---|---|
| < 1 | Potentially undervalued; trading for less than its assets |
| 1–3 | Fairly valued for many stable businesses |
| > 3 | Premium valuation; common for asset-light tech firms |
Measures a corporation's profitability in relation to the equity invested by its shareholders. In short, it answers: 'How effectively is the company using our money to generate profits?'
| ROE % | Interpretation |
|---|---|
| > 15% | Indicates highly efficient use of shareholder capital |
| 10-15% | Solid and acceptable returns |
| < 10% | Suggests inefficient use of capital or weak profitability |
The Relative Strength Index is a momentum oscillator that measures the speed and change of price movements. It identifies overbought or oversold conditions in a stock, signaling potential trend reversals.
| RSI Value | Interpretation |
|---|---|
| < 30 | Oversold; may be due for a price rebound |
| 30–70 | Neutral; no clear momentum signal |
| > 70 | Overbought; may be due for a price correction |
Evaluates a company’s efficiency at generating profits from its total capital (both equity and debt). It shows how well the company is using all available capital to generate earnings.
| ROCE % | Interpretation |
|---|---|
| > 15% | Strong capital efficiency and healthy profitability |
| 10-15% | Reasonable returns; operationally sound |
| < 10% | Potential inefficiency in capital utilization |
Also known as the acid‑test ratio; measures short‑term liquidity excluding inventory—asks whether the company can pay current liabilities using its most liquid assets.
Formula: (Current Assets - Inventory) / Current Liabilities
| Value | Interpretation |
|---|---|
| < 1.0 | May struggle to meet obligations without selling inventory |
| > 1.0 | Able to cover short‑term liabilities with liquid assets |
Shows the percentage of revenue remaining after deducting the cost of goods sold (COGS). Indicates production efficiency and pricing strategy strength.
| Margin % | Interpretation |
|---|---|
| High (e.g. > 40%) | Strong product pricing or low production costs |
| Low or Declining | Pressure on pricing or rising COGS |
Indicates how profitable a company is relative to its total assets. Reflects how efficiently management uses assets to generate earnings.
| ROA % | Interpretation |
|---|---|
| > 5–10% | Efficient asset utilization |
| < 5% | Possible inefficiencies or asset-heavy structure |
Price/Earnings to Growth ratio adjusts P/E by factoring in earnings growth. Helps assess valuation relative to growth expectations.
Formula: P/E Ratio / Earnings Growth Rate (%)
| PEG | Interpretation |
|---|---|
| ≈ 1 | Valuation aligns with growth rate |
| < 1 | Possibly undervalued given growth |
| > 1 | Possibly overvalued relative to growth |
Measures a stock’s volatility relative to the overall market. Indicates how much a stock's price moves compared to a benchmark like the S&P 500.
| Beta | Interpretation |
|---|---|
| < 1 | Less volatile than the market |
| ≈ 1 | Moves in line with market |
| > 1 | More volatile than market; higher risk/reward |
Moving Average Convergence Divergence; a momentum oscillator based on the difference between short and long-term moving averages (usually 12‑ and 26‑day EMAs). Used to identify trend direction and strength.
| MACD Line vs Signal | Interpretation |
|---|---|
| MACD crosses above signal | Bullish momentum |
| MACD crosses below signal | Bearish momentum |
A volatility indicator using a moving average with upper/lower bands set by standard deviations. Helps detect overbought/oversold levels and volatility spikes.
| Price relative to bands | Interpretation |
|---|---|
| Touches upper band | Potential overbought condition |
| Touches lower band | Potential oversold condition |
| Bands widening | Increasing volatility |
| Bands contracting | Decreasing volatility |
Average True Range measures market volatility by decomposing the entire range of an asset price for a given period.
| ATR | Interpretation |
|---|---|
| High ATR | High volatility; larger price swings |
| Low ATR | Low volatility; quieter market |
Used for subscription businesses; the rate at which customers cancel. Vital for SaaS and recurring‑revenue companies.
| Churn % | Interpretation |
|---|---|
| Low (< 5%) | Stable/healthy recurring revenue |
| High (> 10%) | Possible customer dissatisfaction or high turnover |
The average cost to acquire a new customer. Helps assess marketing efficiency and payback period.
| CAC | Interpretation |
|---|---|
| Low vs LTV | Efficient customer acquisition |
| High vs LTV | May not be profitable long‑term |
Measures how many years it would take a company to pay off its debt, assuming current EBITDA stays constant. Gauges leverage relative to operating earnings.
| Debt/EBITDA | Interpretation |
|---|---|
| < 3 | Manageable leverage |
| 3–5 | Moderate leverage |
| > 5 | High leverage; riskier debt load |
Compares a company’s market value to its operating cash flow. Useful for assessing valuation based on real cash generation rather than earnings, which can be more easily manipulated.
| Ratio | Interpretation |
|---|---|
| < 10 | Potentially undervalued with strong cash flow |
| 10–20 | Fair valuation |
| > 20 | Overvalued or weak cash flow relative to market cap |
Measures a firm's ability to pay interest on its debt, calculated as EBIT divided by interest expense. Indicates how comfortably a company can service its debt from operating earnings.
| Ratio | Interpretation |
|---|---|
| < 1.5 | Struggling to cover interest costs |
| 1.5–3 | Moderate coverage; caution advised |
| > 3 | Comfortable interest coverage |
A formula combining multiple ratios to predict the probability of bankruptcy within two years. Commonly used to assess corporate financial distress risk.
| Z‑Score | Interpretation |
|---|---|
| < 1.8 | High bankruptcy risk |
| 1.8–3.0 | Grey area; caution |
| > 3.0 | Financially healthy |
Indicates how many times a company’s inventory is sold and replaced over a period. High turnover suggests efficient inventory management.
| Turns per period | Interpretation |
|---|---|
| High | Efficient sales and inventory use |
| Low | Potential overstock or slow sales |
Measures the average number of days it takes a company to collect payment after a sale. A key indicator of credit and cash collection efficiency.
| Days | Interpretation |
|---|---|
| Low | Faster collections; efficient receivables management |
| High | Slow collections; potential cash flow issues |
Compares operating cash flow to current liabilities, showing how well operations generate cash to meet short-term debts.
| Ratio | Interpretation |
|---|---|
| < 1.0 | May struggle to meet short-term liabilities |
| > 1.0 | Strong operating cash to cover liabilities |
Compares free cash flow per share to the share price. Reflects how much free cash flow investors are getting per dollar invested.
| Yield % | Interpretation |
|---|---|
| < 5% | Modest free cash return |
| 5–10% | Attractive yield |
| > 10% | High yield; check sustainability |
Compares gross sales to net sales to understand the impact of returns, discounts, or allowances on revenue.
| Ratio | Interpretation |
|---|---|
| ≈ 1.0 | Minimal deductions from gross sales |
| < 0.95 | Significant returns/discounts reducing net revenue |
A risk-adjusted return metric that measures excess return per unit of volatility. Used to evaluate the efficiency of investment performance.
| Ratio | Interpretation |
|---|---|
| < 1 | Sub-optimal risk-adjusted return |
| 1–2 | Good risk-adjusted return |
| > 2 | Excellent risk-adjusted return |
Similar to the Sharpe ratio but uses systematic risk (beta) instead of total volatility. Measures how much excess return an investor is receiving for each unit of market risk taken.
| Ratio | Interpretation |
|---|---|
| Higher | Better return relative to market risk |
| Lower | Underperforming on a risk-adjusted basis |
The portion of a company's profit allocated to each outstanding share of common stock. It serves as a key indicator of a company's profitability and is a primary driver of its stock price.
| Trend | Interpretation |
|---|---|
| Consistently Growing | Strong and increasing profitability per share |
| Declining or Negative | Weakening profitability, potential operational issues, or losses |
The percentage of earnings paid to shareholders in dividends. This ratio reveals how much of its profit a company returns to shareholders versus how much it retains to reinvest in growth.
| Ratio % | Interpretation |
|---|---|
| < 30% | Low payout; high earnings retention for reinvestment and growth |
| 30% – 60% | Sustainable and balanced approach to dividends and growth |
| > 60% | High payout; could limit future growth or be unsustainable |
| > 100% | Unsustainable; paying out more than it earns |
Measures a company's operational liquidity, calculated as Current Assets minus Current Liabilities. It represents the resources available to finance day-to-day operations.
| Value | Interpretation |
|---|---|
| Strongly Positive | Sufficient cash and liquid assets to cover short-term obligations |
| Slightly Positive or Negative | Potential liquidity issues; may struggle to pay bills efficiently |
| Strongly Negative | High risk of a liquidity crisis or insolvency |
Calculates the average price of a security over a specific number of periods. SMAs are a core tool for identifying trend direction and generating crossover signals.
| Crossover Event | Interpretation |
|---|---|
| Price crosses above SMA | Bullish signal; short-term momentum is positive |
| Price crosses below SMA | Bearish signal; short-term momentum is negative |
| Golden Cross (SMA 50 > SMA 200) | Signal for a potential long-term bull market |
| Death Cross (SMA 50 < SMA 200) | Signal for a potential long-term bear market |
A momentum indicator that compares a security's closing price to its price range over a given time period. It helps identify overbought and oversold conditions.
| Value | Interpretation |
|---|---|
| < 20 | Oversold; may be due for a price bounce |
| 20 – 80 | Neutral; no clear momentum signal |
| > 80 | Overbought; may be due for a price pullback |
A momentum indicator that uses volume flow to predict changes in stock price. It suggests that volume precedes price moves, helping to confirm trends or spot reversals.
| Trend | Interpretation |
|---|---|
| Rising OBV | Confirms an uptrend (buying pressure) |
| Falling OBV | Confirms a downtrend (selling pressure) |
| Divergence (e.g., Price Up, OBV Down) | Potential trend reversal ahead |
A technical indicator used to determine the strength of a trend, but not its direction. It helps traders decide whether to use a trend-following or a range-trading strategy.
| ADX Value | Trend Strength |
|---|---|
| < 25 | Weak or non-existent trend (ranging market) |
| 25 – 50 | Strong trend |
| > 50 | Very strong and mature trend |
A versatile, all-in-one indicator that provides information on trend direction, momentum, and dynamic support/resistance levels. The 'Cloud' is its most prominent feature.
| Price Location | Interpretation |
|---|---|
| Above the Cloud | Strong bullish trend |
| Below the Cloud | Strong bearish trend |
| Inside the Cloud | Trend is consolidating or unclear; high volatility |
| Cloud Color | Green cloud suggests bullish bias; red cloud suggests bearish bias |
A technical analysis tool used to identify potential support and resistance levels. It's based on the idea that prices will retrace a predictable portion of a move before continuing in the original direction.
| Key Levels | Interpretation |
|---|---|
| 23.6%, 38.2%, 50%, 61.8% | Potential support levels in an uptrend or resistance levels in a downtrend |
| Retracement holds at a level | Confirms the level as support/resistance, suggesting trend continuation |
| Price breaks through a key level | Suggests the previous trend may be weakening or reversing |
Calculates the per-share value of a company based on its equity available to common shareholders. It represents the net asset value of a company on a per-share basis.
| Comparison | Interpretation |
|---|---|
| Stock Price < BVPS | May indicate the stock is undervalued |
| Stock Price > BVPS | Investors are willing to pay a premium over the company's net asset value |
Measures the number of days it takes a company to convert its investments in inventory and other resources into cash flows from sales. A lower number is better.
| CCC Value (Days) | Interpretation |
|---|---|
| Low or Negative | Highly efficient; company gets paid by customers before it pays suppliers |
| High or Increasing | Cash is tied up in inventory and receivables for longer; potential inefficiency |
Companies demonstrating strong, recent growth in both earnings and sales, a core principle of the CANSLIM methodology.
| Metric | Operator | Value |
|---|---|---|
| YoY EPS Growth | > | 20% |
| Quarterly Sales Growth | > | 25% |
Banks that operate with high operational efficiency and profitability, indicated by low costs relative to income and high returns on equity.
| Metric | Operator | Value |
|---|---|---|
| Cost-to-Income Ratio | < | 55% |
| Return on Equity (ROE) | > | 15% |
Small-cap companies exhibiting hyper-growth characteristics, aiming to become future market leaders.
| Metric | Operator | Value |
|---|---|---|
| Market Capitalization | < | $2B |
| YoY Revenue Growth | > | 30% |
Companies with exceptionally strong balance sheets, operating with virtually no debt.
| Metric | Operator | Value |
|---|---|---|
| Debt-to-Equity Ratio | < | 0.1 |
Stable, growing companies with low debt, aligning with the investment philosophy of Peter Lynch.
| Metric | Operator | Value |
|---|---|---|
| Debt-to-Equity Ratio | < | 0.5 |
| YoY Earnings Growth | > | 15% |
Companies backed by increasing conviction from institutional investors, indicated by a recent rise in ownership.
| Metric | Operator | Value |
|---|---|---|
| Institutional Holdings Increase (Quarterly) | > | 5% |
Companies that offer an attractive dividend yield supported by sustainable earnings.
| Metric | Operator | Value |
|---|---|---|
| Dividend Yield | > | 3% |
| Payout Ratio | < | 60% |
Companies achieving organic growth without diluting shareholder value by issuing new stock.
| Metric | Operator | Value |
|---|---|---|
| YoY Revenue Growth | > | 10% |
| Shares Outstanding Growth | < | 1% |
Companies that have successfully reversed a period of poor performance and are now demonstrating sustained profitability.
| Metric | Operator | Value |
|---|---|---|
| EPS (2 Years Ago) | < | 0 |
| Trailing Twelve Months EPS | > | 0 |
Companies actively investing in future growth through significant, publicly announced capital expenditure plans.
| Metric | Operator | Value |
|---|---|---|
| Significant CapEx Announcement (Last 6 Months) | exists | true |
Quality mid-cap stocks that exhibit strong profitability and higher-than-average growth potential.
| Metric | Operator | Value |
|---|---|---|
| Market Capitalization | between | $2B-$10B |
| Return on Equity (ROE) | > | 18% |
| YoY Sales Growth | > | 15% |
Companies that demonstrate operational leverage by disproportionately growing profits relative to sales.
| Metric | Operator | Value |
|---|---|---|
| Net Profit Margin Expansion (YoY) | > | 2% |
Highly profitable companies that generate substantial and consistent free cash flow relative to their market price.
| Metric | Operator | Value |
|---|---|---|
| Free Cash Flow Yield | > | 10% |
Reliable companies that have demonstrated an ability to consistently grow both their top and bottom lines over a long period.
| Metric | Operator | Value |
|---|---|---|
| Consecutive Years of Revenue & EPS Growth | >= | 5 |
Value stocks that meet Benjamin Graham's classic criteria for being quantitatively undervalued.
| Metric | Operator | Value |
|---|---|---|
| Price-to-Earnings (P/E) Ratio | < | 15 |
| Price-to-Book (P/B) Ratio | < | 1.5 |
Companies that are highly effective at using their assets to generate revenue.
| Metric | Operator | Value |
|---|---|---|
| Asset Turnover Ratio | > | 1.5 |
Companies whose stocks are potentially undervalued, trading at a discount to their tangible book value while maintaining profitability.
| Metric | Operator | Value |
|---|---|---|
| Price-to-Book (P/B) Ratio | < | 1.0 |
| Forward EPS Estimate | > | 0 |