Earnings Per Share (EPS)
A measure of profitability calculated as the portion of a company’s net income allocated to each outstanding share of common stock. EPS is a key ratio in fundamental analysis and feeds into metrics such as the price-to-earnings ratio and return on equity.
Related terms
Dividend
A share of profits and retained earnings that a company pays out to shareholders, usually annually, after reinvesting a portion in the business. Often regarded as a measure of a company’s health and good management.
Read full definitionFundamental Analysis
Analysis of the economic and political factors that influence prices, from the overall health of an industry or country to company-specific details such as management decisions, revenue and profit. For currencies this includes interest rates, inflation, GDP growth and central bank policy, and it can be applied to indices, stocks, forex and commodities.
Read full definitionMarket Capitalisation
The total market value of a company’s outstanding shares, calculated as share price multiplied by shares outstanding. Market cap is a key indicator of a company’s size, financial strength, market position and growth potential.
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Adjustment
The impact on a share price of a company paying out dividends on the ex-date. The price takes a slight dip because money flows out of the company to shareholders, with the dividend adjustment occurring at the close of business before the ex-dividend date.
Read full definitionAUS 200
A term for the Australian Securities Exchange index (ASX 200), which tracks the top 200 companies by market capitalisation listed on the Australian stock exchange.
Read full definitionBear Market
Any market that experiences a fall of around 20% or more from its recent high. Most commonly applied to stock markets, the term can also be used for anything traded, including currencies and commodities. It is the opposite of a bull market.
Read full definitionBonds
A fixed-income investment representing a loan made by an investor to a borrower, typically corporate or governmental. It works like an I.O.U. between lender and borrower that includes the details of the loan and its payments.
Read full definitionBull Market
Any market in which prices are rising or expected to rise imminently. Typically applied to stock markets, the term can also be used for anything traded, including currencies and commodities. It is the opposite of a bear market.
Read full definitionCash Market
A marketplace where securities are paid for and delivered immediately at the point of sale. A stock exchange is a cash market because investors receive their shares as soon as they have paid for them.
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