Financial Ratios & Metrics

Every number on a Tenet report explained: what it measures, the formula, what good looks like, and the traps.

Every number on a Tenet report has a story: what it measures, how it is calculated, what good looks like, and the trap that inflates it. These guides turn the ratio grid into something you can read at a glance and question when it looks too good.

18 articles in this module

Return on Equity (ROE): What It Really Tells You

Return on equity measures profit earned per dollar of shareholder equity. Learn the formula, what counts as good, and the debt trap that quietly inflates it.7 min read

Return on Invested Capital (ROIC): What It Tells You

Return on invested capital measures profit earned on all the money a business uses, debt and equity. Learn the formula, what good looks like, and the WACC test.7 min read

Return on Assets (ROA): What It Tells You

Return on assets measures how much profit a company earns per dollar of assets. Learn the formula, what good looks like, and why you can only compare within a model.6 min read

Gross Margin: What It Tells You About a Business

Gross margin measures the profit left after the direct cost of making a product. Learn the formula, what good looks like, and why mix shift can fool you.6 min read

Operating Margin: What It Tells You About a Business

Operating margin measures profit from core operations as a share of revenue. Learn the formula, what good looks like, and how one-off charges distort it.6 min read

Net Profit Margin: What It Tells You

Net profit margin measures the bottom-line profit a company keeps per dollar of revenue. Learn the formula, what good looks like, and why tax quirks flatter it.6 min read

Earnings Per Share (EPS): What It Really Tells You

Earnings per share splits a company's profit across its shares. Learn the formula, basic versus diluted, and how buybacks grow EPS with no real improvement.6 min read

Free Cash Flow Yield: What It Tells You

Free cash flow yield compares the cash a business generates to its price. Learn the formula, what good looks like, and how starving capex fakes a high yield.6 min read

Debt-to-Equity Ratio: What It Tells You

The debt-to-equity ratio measures how much a company borrows against its own capital. Learn the formula, what good looks like, and why buybacks can spike it.7 min read

Current Ratio: What It Tells You About Liquidity

The current ratio measures whether a company can cover its short-term bills. Learn the formula, what good looks like, and why a fat ratio can be dead inventory.6 min read

Interest Coverage Ratio: What It Tells You

The interest coverage ratio shows how easily a company pays the interest on its debt. Learn the formula, what good looks like, and why peak earnings mislead.7 min read

Price-to-Earnings (P/E) Ratio: What It Tells You

The price-to-earnings ratio compares a stock's price to its profit. Learn the formula, what good looks like, and why a low P/E is often cheap for a reason.7 min read

Price-to-Book (P/B) Ratio: What It Tells You

The price-to-book ratio compares a stock's price to its net assets. Learn the formula, where it is most informative, and how intangibles change what it measures.6 min read

EV/EBITDA

Reference

PEG Ratio: What It Tells You About Growth and Price

The PEG ratio weighs a stock's P/E against its growth rate. Learn the formula, what good looks like, and why a bad growth estimate makes the whole number junk.6 min read

Dividend Yield: What It Tells You

Dividend yield measures the cash a stock pays relative to its price. Learn the formula, what good looks like, and the yield trap that lures income investors.6 min read

Share Buybacks Explained: When They Create Value

Share buybacks return cash by shrinking the share count. Learn how they work, when they create value versus destroy it, and how they flatter EPS and ROE.6 min read

Piotroski F-Score

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