Finelo Blog
Learn investing and trading, one article at a time. Practical guides, beginner-friendly explainers, and learning tips from the Finelo team.
What is Book Value Per Share and Why Does It Matter?
Book value per share (BVPS) is a company's net worth divided across its shares. You calculate it by taking total shareholders' equity, subtracting any preferred equity, and dividing by common shares outstanding. It…
What is a Secondary Offering?
A secondary offering is a sale of stock that happens after a company has already gone public through its IPO. Either the company issues new shares to raise fresh capital, or existing shareholders sell shares they…
What is a Risk Parity Portfolio and How Does It Work?
A risk parity portfolio is an allocation strategy that balances how much risk each asset class contributes, rather than how many dollars each receives. Instead of putting 60% of the money in stocks and 40% in bonds…
What is a Rights Offering? A Complete Overview
A rights offering is a capital raise in which a company gives its existing shareholders the right, but not the obligation, to buy additional shares directly from the company, usually at a discount to the market price…
What is a Market Breadth Indicator and How Does It Work?
A market breadth indicator measures how many stocks are actually participating in a market move, rather than how far the index itself has traveled. If an index rises while most of its stocks fall, breadth is weak and…
What is a Fill or Kill Order?
A fill or kill order (FOK) is a trade instruction that must be executed immediately and completely, or not at all. If the market cannot fill the entire order right away, the whole order is cancelled, with no partial…
What Are Stock Warrants and How Do They Work?
Stock warrants are contracts issued by a company that give you the right, but not the obligation, to buy its stock at a fixed price before an expiration date. When you exercise a warrant, the company issues new shares…
Price-to-Sales Ratio: Formula, Meaning, and Examples
The price to sales ratio compares what the market pays for a company to the revenue it generates. You calculate it by dividing market capitalization by annual sales, or share price by sales per share. A P/S of 2 means…
Understanding the Price to Book Ratio
The price to book ratio compares a company's market value to the accounting value of what it owns. You calculate it by dividing the stock price by book value per share. A P/B of 1 means the market prices the company at…
Understanding the Interest Coverage Ratio: A Comprehensive Guide
The interest coverage ratio (ICR) measures how easily a company can pay the interest on its debt from its operating earnings. You calculate it by dividing EBIT, earnings before interest and taxes, by interest expense…
Understanding the Information Ratio and How to Use It
The information ratio measures how much extra return a portfolio earns above its benchmark for each unit of active risk taken. You calculate it by dividing excess return by tracking error. A higher information ratio…
Understanding the Forward P/E Ratio: A Comprehensive Guide
The forward P/E ratio divides a company's current share price by its expected earnings per share over the next 12 months or the next fiscal year. Where the classic P/E looks backward at reported profits, the forward pe…
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