Stocks glossary
Updated
by Tolu
A collection of easy-to-understand stock terms
Stocks | These represent the ownership of a percentage of a company. It is also known as shares and equities. | |
Stock market | This is where you can buy & sell shares. | |
Shareholder | A person who owns shares in a company. | |
Market value | The number of outstanding shares a company has multiplied by its current share price. It is the amount investors believe a company is worth. | |
Outstanding shares | The stock held by shareholders. | |
Market cap | This is the total value of a company’s outstanding shares. | |
Earnings | A company’s profit for a quarter or fiscal year. | |
Dividend | The money companies pay their shareholders from the profit they’ve made. | |
Earnings per share | This is a company’s profit divided by its total outstanding shares. It tells you how much a company makes per share | |
Price to earnings ratio | This is a company’s share price compared to the profit they make per share. It is commonly called P/E ratio. | |
Earnings before interest, tax, depreciation & Amortization | The amount a company makes before interest, tax, depreciation & amortization are deducted. it tells you if a company is profitable enough to settle interest on debts and pay its shareholders. It is commonly called EBITDA. | |
Debt to equity ratio | This is a company’s total debt compared to its market value. | |
52 week high | This is the highest amount a stock has traded at in the past year, that is, within 52 weeks. | |
52 week low | This is the highest amount a stock has traded at in the past year, that is, within 52 weeks. | |
Bear market | This refers to a time when prices are declining. | |
Bull market | This refers to a time when prices are rising. |
