NKE

Adjusts the numerator for debt and cash so heavily-levered or cash-rich companies are comparable. Particularly useful for cross-industry valuation work.

Useful when earnings are negative or noisy (early-stage companies, restructurings). Works best within an industry because gross margin profiles vary wildly.

Productivity of the asset base. Combined with net margin, this is the DuPont decomposition of ROA: ROA = net_margin * asset_turnover.

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'.

Sanity-check on earnings quality. Persistently below 1 means working capital or capex is consuming earnings; persistently above 1 is unusual and may flag accounting conservatism or non-cash drags.

Pre-capex version of cash conversion. Numbers persistently below 1 suggest accruals are doing the work; numbers persistently above 1 are a (mild) positive sign.

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.

Strips out receivables and inventory, leaving only cash and equivalents over current liabilities. Stress-tests whether the business can meet obligations even if collections seize up.

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.

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.

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

Direct income from holding the share. Stable dividend yield often signals capital discipline; abnormally high yield can be a warning that the dividend isn't covered by FCF and may be cut.

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.

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.

Bullish when %K crosses above %D while both lines are below the oversold threshold; bearish when %K crosses below %D while both are above overbought.

+1 on bullish cross in oversold; -1 on bearish cross in overbought; 0 otherwise.

+1 = oversold bullish cross, -1 = overbought bearish cross.