Finance Articles
In-depth, free articles on financial analysis, valuation, investing, corporate finance, and financial markets — no paywalls, no sign-ups.
25 articles
What Is IRR? Internal Rate of Return Explained
The discount rate that makes an investment's NPV exactly zero — learn the formula, a full worked example with trial calculations, the WACC decision rule, and when IRR misleads.
What Is the Debt Service Coverage Ratio (DSCR)? Formula and Benchmarks
DSCR is the single number banks check before deciding if your business can safely carry more debt — here's the formula, a full worked example, and what lenders actually require.
Enterprise Value vs Market Cap: Why They Measure Different Things
Market cap prices the equity. Enterprise value prices the entire business. The gap between them changes every valuation multiple you use — here's the EV formula, a full worked example, and when to use each metric.
What Is Earnings Per Share (EPS)? Formula, Types, and How to Use It
EPS tells you exactly how much profit a company generated for each share — here's how to calculate it, interpret it, and spot when the number is being gamed.
What Is Net Present Value (NPV)? Formula, Calculation, and Examples
NPV answers the one question every investment decision comes down to: is this project worth more than it costs? Here's the formula, a full worked example, and how to actually use it.
What Is the Cash Conversion Cycle? Formula, Components, and Real-World Use
The CCC measures how many days it takes a business to turn a cash outlay back into collected revenue — and a shorter cycle means less reliance on external financing.
What Is Return on Assets (ROA)? Formula, Benchmarks, and How to Use It
ROA tells you how efficiently a company converts its asset base into profit — here's the formula, a full worked example, industry benchmarks, and how it differs from ROE.
Interest Coverage Ratio Explained: Formula, Benchmarks, and What It Reveals
The interest coverage ratio tells you exactly how many times over a company can pay its interest bill — and whether its debt load is a calculated risk or a slow-motion crisis.
What Is Operating Leverage? Formula, DOL, and Why It Matters
Operating leverage determines how much a revenue change amplifies your operating profit — for better or worse. Here’s the DOL formula, a full worked example comparing a software company and a distributor, and what high operating leverage means for risk.
What Is Book Value? Formula, Calculation, and How Investors Use It
Book value is what the accounting records say a company is worth — and the gap between that figure and the market price is one of the most revealing signals in investing.
Capital Gains vs Dividend Income: Two Ways to Profit from Stocks
Capital gains and dividend income are the two ways stocks generate returns — but they're taxed differently, timed differently, and suited to very different investor profiles.
Gross Income vs Net Income: What's the Difference?
Both numbers live on the same income statement, but they measure profit at completely different points — here's the exact difference, the formulas, a full worked example, and what each reveals about a business.
What Is Operating Cash Flow? Formula, Calculation, and What It Reveals
Operating cash flow strips away accounting adjustments to show whether a business truly generates cash from its core operations — the most reliable signal of financial health that net income can't match.
What Is Dividend Yield? Formula, Calculation, and What It Signals
Dividend yield tells you how much income you earn per rupee invested in a stock — but not all high yields are good news.
What Is Terminal Value? The Number That Makes or Breaks a DCF
Terminal value often accounts for 60–80% of a company's DCF enterprise value — here's what it is, how to calculate it using both the Gordon Growth Model and exit multiple method, and where analysts get it wrong.
What Is the P/E Ratio? How to Read and Use Price-to-Earnings
The most widely quoted stock valuation metric — here's what it actually measures, how to calculate it, and when not to trust it.
Revenue vs Profit: What's the Difference and Why It Matters
Revenue is what a business earns. Profit is what it keeps. Here's the exact difference, the three layers of profit on every income statement, and why the gap between them is the most important number in business.
Working Capital Explained: Formula, Calculation, and What It Tells You
Working capital reveals whether a business can cover its near-term obligations — here's the formula, how to calculate it, and what the number actually means.
Gross Margin vs Operating Margin vs Net Margin: What Each Reveals About Profitability
Three percentages on every income statement — each one measures profitability at a different layer. Here's what each reveals and how to read all three together.
Free Cash Flow vs Net Income: What's the Difference and Why It Matters
Net income and free cash flow can tell two completely different stories about the same company — here's how to read both and know which to trust.
FCFF vs FCFE: What's the Difference and When to Use Each
Two ways to measure free cash flow — which you pick determines your discount rate, your model structure, and the valuation you get. Formulas, worked examples, and when to use each.
What Is Return on Equity (ROE)? Formula, DuPont Analysis, and How to Interpret It
ROE tells you how efficiently a company converts shareholder capital into profit — here's the formula, a full DuPont decomposition, sector benchmarks, and the leverage trap to watch.
What Is WACC?
WACC is the minimum return a company must earn to satisfy all investors — here's how the formula works, how to calculate it step by step, and why it drives DCF valuation.
Enterprise Value vs Equity Value: Key Differences Explained
Most valuation mistakes trace back to mixing up these two numbers — learn the exact distinction, the EV bridge formula, and which multiples use which.
What Is the Debt-to-Equity Ratio? Formula, Interpretation, and Use in Finance
The D/E ratio measures how much of a company is financed by creditors versus shareholders — formula, worked example, sector benchmarks, and key limitations explained.
What Is EBITDA? Meaning, Formula, and Why Investors Use It
EBITDA explained: what it means, the two calculation methods, why analysts use it for M&A and valuation, and the key limitations you need to know — with a worked example.
Stocks vs Bonds: Key Differences Every Investor Should Know
Ownership vs lending, risk profiles, return types, income structure, and how stocks and bonds fit together in a portfolio — a complete investor comparison.