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Capital-structure-agnostic valuation multiple. Useful for comparing levered companies because it adds debt and removes cash from the numerator and uses pre-interest, pre-tax, pre-depreciation earnings in the denominator.

The multiple equity analysts most commonly quote because it reflects expected earnings rather than the trailing window. Same caveats as trailing P/E - a depressed multiple may be a value trap if forward earnings are too optimistic.

Capital-structure-agnostic earnings yield. Pairs with Greenblatt ROC to compute the Magic Formula rank (the universe-rank of EY plus universe-rank of ROC). Pre-tax operating earnings divided by the full claim on the firm.

Divides P/E by the annualized EPS growth rate (in percent points). Below 1.0 is conventionally read as 'cheap relative to growth.' Sensitive to which growth window you use; can flip sign if earnings are negative.

Adds dividend yield to the growth denominator so mature dividend payers don't get unfairly punished by a low-growth PEG. Sweet spot ~1.0; below 0.5 is often a broken growth assumption, above 2 is over-paying.

Lower is better for shareholder cash returns; very low values can flag under-investment in a capital-intensive business. Pairs with FCF margin to separate 'thin operating margin' from 'fat operating margin offset by heavy capex'.

Easier to compare than operating_margin across firms with very different leverage / depreciation profiles. Software platforms commonly run above 30%; capital-light service businesses cluster around 20%.

Joel Greenblatt's reformulation of return-on-capital that excludes goodwill, acquired intangibles, and financial assets, focusing instead on the tangible operating capital that actually generates EBIT. Pairs with Greenblatt's Earnings Yield (EBIT/EV) to produce the Magic Formula rank.

Pre-tax cousin of ROIC using operating capital employed (long-term debt + equity ≈ total assets less current liabilities). Damodaran publishes ROCE by industry, so it benchmarks cleanly.

Measures how productive the actual operating capital base is, independent of capital structure. The benchmark is the company's cost of capital - sustained ROIC above WACC creates value, below WACC destroys it.

Bottom-line growth on a per-share basis, capturing both operating progress and any net buyback effect. The denominator uses absolute prior EPS so a turnaround from negative to positive earnings reads with the conventional sign.

Top-line growth - the cleanest way to see whether the franchise is expanding. Best read alongside margin trend; revenue rising while margin compresses is often discount-driven volume rather than real growth.

Solvency-under-stress measure. A ratio of 1x means EBIT exactly covers interest with nothing left over; 5x is comfortable for an industrial; below 2x is a credit-watch level. Especially important when leverage is rising or profits are cyclical.

Bond covenants are commonly written against this ratio. Above ~5x is high-yield territory; investment-grade industrials typically run below 3x. Negative net debt (more cash than debt) means the firm could pay off its bonds and still hold cash.

The acid-test variant of current ratio strips inventory from current assets, since inventory can be stale or written down before it becomes cash. Sweet spot 1.2x; below 0.5x signals liquidity stress, above 3x signals trapped working capital.

The single best operations-quality metric. Negative CCC means the firm is funded by suppliers (Apple, Costco). Long CCC ties up working capital and forces operating-loan dependence.

Earnings-quality flag. Receivables growing faster than revenue is one of the cleanest tells for revenue recognition stretching. Beneish-style.

DuPont productivity measure. Combined with margin it tells the asset-light vs asset-heavy story. Very high turnover in retail can flag stockouts — the metric reads best industry-relative.

Five-factor distress signal originally calibrated for US public manufacturers. Above 3.0 is the conventional 'safe' zone, 1.8-3.0 is the grey zone, below 1.8 historically associates with elevated bankruptcy risk.

Beneish (1999) calibrates eight financial-statement indices against a sample of known manipulators. M < -2.22 reads as unlikely manipulator; M >= -1.78 as likely manipulator; the gap is grey. Companion to Altman Z but for fraud risk rather than bankruptcy.

Richard Sloan's accruals-quality measure. Persistent positive accruals (NI exceeds OCF) tend to mean-revert via earnings disappointments. Large negative values are usually fine but can flag one-time working-capital releases or non-cash drags. Phase D-2 made this a target-window metric centred at zero.