Compass Stock

📈 What is it?

Market capitalization shows how much a company is currently worth on the stock market.

🧮 How is it calculated?

🏛️ Why is it important?

It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.

🧮 Calculation

📈 What is it?

Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.

🧮 How is it calculated?

🏛️ Why is it important?

EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.

🧮 Calculation

📈 What is it?

Net Debt shows how much debt remains after subtracting a company’s available cash reserves.

🧮 How is it calculated?

🏛️ Why is it important?

It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.

🧮 Calculation

📈 What is it?

Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.

🧮 How is it calculated?

🏛️ Why is it important?

It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.

🧮 Calculation

📈 What is it?

Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.

🧮 How is it calculated?

🏛️ Why is it important?

It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).

🧮 Calculation

📈 What is it?

The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.

🧮 How is it calculated?

🏛️ Why is it important?

The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.

🧮 Calculation

📈 What is it?

The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.

🧮 How is it calculated?

🏛️ Why is it important?

P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.

📈 What is it?

EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.

🧮 How is it calculated?

🏛️ Why is it important?

It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.

📈 What is it?

EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.

🧮 How is it calculated?

🏛️ Why is it important?

It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.

🧮 Calculation

📈 What is it?

The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.

🧮 How is it calculated?

🏛️ Why is it important?

P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.

🧮 Calculation

📈 What is it?

The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.

🧮 How is it calculated?

🏛️ Why is it important?

A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.

🧮 Calculation

📈 What is it?

Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.

🧮 How is it calculated?

🏛️ Why is it important?

ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.

🧮 Calculation

📈 What is it?

ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.

🧮 How is it calculated?

🏛️ Why is it important?

ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.

🧮 Calculation

📈 What is it?

ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.

🧮 How is it calculated?

🏛️ Why is it important?

ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.

🧮 Calculation

📈 What is it?

The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.

🧮 How is it calculated?

🏛️ Why is it important?

This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.

🧮 Calculation