CBOE

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%.

End-to-end conversion ratio: of every dollar of revenue, how much falls through to genuine free cash flow available to capital providers? More honest than net margin because it accounts for capex needed to maintain the business.

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.

First-line profitability measure - how much revenue is left after the direct cost of producing it. Stable gross margin suggests pricing power and low input-cost exposure.

Operating margin minus interest, tax, and below-the-line items. Useful but noisy because tax rate and debt service distort year-to-year comparability.

Captures the leverage between revenue and operating profit. Core test of whether a business converts sales into income at the operating level.

Capital-efficiency measure that ignores how the assets are financed. Useful for comparing within a sector but biased low for asset-heavy businesses (banks, utilities) and high for asset-light ones.

Headline profitability metric. High ROE compounds book value if the business can reinvest at the same return. Beware of buybacks artificially inflating ROE by shrinking the denominator.

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.

Whether the company can cover near-term obligations from near-term assets. Below 1.0 doesn't mean insolvent (cash flow can cover the gap) but is worth a closer look.

Useful complement to debt-to-equity. Banks, REITs, and post-buyback firms can have small or negative book equity, which makes D/E unstable; D/A stays well-behaved because the denominator is always positive. Industry context still matters - utilities run higher than software.

How much the company funds itself with debt vs. equity. Higher leverage amplifies both returns and risks; the appropriate level varies wildly by industry.

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.

Strips out short-term operating debt and revolver use to focus on permanent capital structure. Useful when comparing companies that fund working capital differently.

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.

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.

Joseph Piotroski's score for distinguishing winners from losers among low-P/B stocks. Each of 9 questions answers 0 or 1; the more 'yes' answers, the higher quality the recent year-over-year improvements.

Fires on the bar where the MACD line (EMA12-EMA26) crosses through the signal line (EMA9 of MACD). Bullish when MACD crosses up through signal, bearish when it crosses down. Far more commonly used as a trade trigger than divergence (see macd_divergence for the slower confirmatory tell).

+1 on bullish cross (MACD crosses up through signal); -1 on bearish cross (MACD crosses down through signal); 0 otherwise.

+1 = bullish MACD-signal cross, -1 = bearish MACD-signal cross.