Calculators

Calculate and Interpret Tobin’s Q Ratio

Tobin’s Q ratio or the “Q ratio” works on the theory that the total market value of companies on the stock market should equal replacement costs of those company’s assets. For some investors, Tobin’s Q ratio offers a fundamental standard of value to assess the current level of the stock market. Devised by [...]

Calculate and Interpret Free Cash Flow per Share

Free cash flow per share is a measure of the financial strength and flexibility of a company that is calculated by dividing the company’s free cash flow by the number of shares it has outstanding. Free cash flow per share is a useful metric for investors to track as it helps to understand the [...]

Calculate the Coupon Equivalent Rate

Coupon Equivalent Rate (CER) is a measure of yield that enables comparison of securities quoted on a discount basis to those quoted on the more typical return on principal invested. Measuring interest at the coupon equivalent rate is practical for Treasury Bills, commercial paper and other securities that are sold for less than face [...]

Calculate the Sharpe Ratio

The Sharpe Ratio is a formula developed by Nobel laureate William F. Sharpe to measure risk-adjusted performance by examining the additional return received for the added volatility of a higher-risk asset. A high Sharpe Ratio indicates a greater return for each unit of risk. By examining the Sharpe Ratio, an investor can make [...]

Calculate the Standard Deviation of a Portfolio

Standard deviation is a term used in probability theory and statistics to measure the variability of a set of data. A low standard deviation means that the data points tend to assemble close to the mean while a high standard deviation indicates that the data tends to spread out over a larger range. [...]

Calculate and Interpret the Equity Multiplier Ratio

The equity multiplier ratio is used to measure a company’s total assets against stockholder’s equity, providing a way for investors to examine the level to which a company uses debt to finance its assets. A high equity multiplier indicates a more highly-leveraged company. The equity multiplier, like other leverage ratios, can help investors [...]

Calculate and Interpret the Price/Cash Flow Ratio

The price/cash flow (P/CF) ratio is used to compare the market value of a company to its cash flow. Like the Price/Earnings (P/E) ratio, P/CF provides investors with a sense of relative value. While the P/E ratio is probably the most commonly used measure of valuation, many analysts prefer the P/CF ratio since [...]

Calculate and Interpret the Operating Cash Flow Ratio

Operating Cash Flow, also called “cash flow from operating activities”, represents the cash generated by a company through business operations. The general formula for operating cash flow is the company revenues less the costs of company operations. Because it accounts for liabilities, receivables, and depreciation, operating cash flow is often seen as a [...]

Calculate and Interpret the Debt-to-Assets Ratio

The debt-to-assets ratio or “total debt to total assets” ratio is used to measure the overall financial health of a company by determining the level to which the company has financed its assets through debt. In general, the higher the debt-to-assets ratio, the greater the risk the company will run into financial issues. [...]

John Burr Williams Stock Valuation Calculator

John Burr Williams (1900 – 1989) was one of the first economists to advocate the need to arrive at a stock’s “intrinsic” value when considering it for investment. Williams believed that, due to the inherent volatility of the stock market, investors should consider the ability of the company to pay dividends over the long-term. [...]