Detailed Explanation of Stock Financial Metrics – Essential Financial Indicators for Stock Trading

Recently, we have compiled some key stock financial metrics for your reference:

1. Operating Revenue: The recurring sales income generated from a company’s core business operations.

2. Gross Profit: The remaining amount after subtracting the cost of goods sold from sales revenue.

3. Net Profit: The company’s total profit minus income tax, also known as after-tax profit.

4. Net Profit Margin: The ratio of net profit to total revenue, reflecting profitability efficiency.

5. Adjusted Net Profit (Non-GAAP): Net profit excluding non-recurring gains/losses (e.g., asset sales, investment gains/losses).

6. Price-to-Earnings Ratio (P/E): The ratio of stock price to earnings per share (EPS), measuring stock valuation.

7. Price-to-Book Ratio (P/B): The ratio of stock price to book value per share.

8. Earnings Per Share (EPS): Net profit divided by total shares outstanding, measuring profitability.

9. Net Assets (Equity): Total assets minus total liabilities, also called shareholders’ equity.

10. Book Value Per Share (BVPS): Shareholders’ equity divided by total shares outstanding.

11. Dividend Yield: The ratio of dividends per share to the current stock price, measuring dividend returns.

12. Return on Assets (ROA): Net profit divided by total assets, measuring asset utilization efficiency.

13. Return on Equity (ROE): Net profit divided by shareholders’ equity, measuring return on investment.

14. Debt-to-Equity Ratio: Total liabilities divided by shareholders’ equity, reflecting financial leverage.

15. Current Ratio: Current assets divided by current liabilities, measuring short-term solvency.

16. Quick Ratio: (Current assets minus inventory) divided by current liabilities, measuring immediate liquidity.

17. Operating Cash Flow: The net cash generated from core business operations, reflecting cash generation ability.

18. Financing Cash Flow: Cash flows from fundraising activities (e.g., issuing stocks/bonds, loans).

19. Investing Cash Flow: Cash flows from long-term asset investments, acquisitions, and disposals (excluding cash equivalents).