Stock Market Glossary
60 financial terms every serious Indian investor must understand — written in plain English with real examples from TCS, HDFC Bank, Asian Paints, Bajaj Finance, D-Mart, and more. Every definition links to the BBS course that teaches it in full depth.
A
Altman Z-Score — A formula that predicts whether a company may go bankrupt.
▼Annual Report — A company's yearly financial and operational disclosure to shareholders.
▼Asset Turnover — How efficiently a company generates revenue from every rupee of assets.
▼B
Balance Sheet — A snapshot of what a company owns, owes, and is worth at one point in time.
▼Beneish M-Score — A model that detects potential earnings manipulation in financial statements.
▼Beta — How much a stock moves relative to the overall market index.
▼Book Value — The net worth of a company after subtracting all its liabilities from its assets.
▼C
Capital Allocation — How management decides to deploy the profits the business generates.
▼Capex — Money spent on buying or upgrading long-term physical assets.
▼Cash Conversion Cycle — Days taken for a company to turn inventory purchases into cash from customers.
▼Cash Flow Statement — A record of all real cash entering and leaving a company in a period.
▼Compounding — Earning returns on both your principal and all previously accumulated returns.
▼Current Ratio — Whether a company can pay its short-term bills using its short-term assets.
▼D
DCF — Discounted Cash Flow — A valuation method estimating a company's worth from its future cash flows.
▼Debt-to-Equity Ratio — How much of a company's funding comes from debt versus equity.
▼Depreciation — Annual reduction in book value of a physical asset spread over its useful life.
▼Dividend — A cash payment made to shareholders from a company's profits.
▼Dividend Yield — Annual dividend expressed as a percentage of the current share price.
▼DuPont Analysis — A framework breaking ROE into three drivers to see what really powers it.
▼E
EBIT — Operating profit before paying interest and income tax.
▼EBITDA — Operating profit before interest, tax, depreciation, and amortisation.
▼EBITDA Margin — Operating profit as a percentage of revenue before non-cash charges.
▼Enterprise Value — Total value of a company including its debt, minus the cash it holds.
▼EPS — Earnings Per Share — The share of a company's profit that belongs to each outstanding share.
▼EV/EBITDA — A valuation multiple comparing enterprise value to operating profit.
▼F
Float — The portion of a company's shares available for public trading.
▼Free Cash Flow — Cash left after paying for operations and capital spending — truly free money.
▼G
Goodwill — The premium paid above net asset value when acquiring another company.
▼Graham Number — Benjamin Graham's formula for the maximum fair price of a value stock.
▼Gross Margin — Revenue minus direct production costs, expressed as a percentage.
▼I
Interest Coverage Ratio — How many times operating profit covers the company's interest payments.
▼Intrinsic Value — What a business is truly worth based on its future earnings power.
▼Inventory Turnover — How many times a company sells and replaces its stock in a year.
▼IPO — Initial Public Offering — When a private company sells shares to the public for the first time.
▼L
LTCG — Long Term Capital Gains — Tax on profit from selling listed equity held for more than one year.
▼M
Margin of Safety — Buying a stock well below intrinsic value to buffer against errors.
▼Market Capitalisation — Total value of all a company's shares at the current market price.
▼Moat — Economic Moat — A durable competitive advantage that protects profits from rivals over time.
▼N
Net Interest Margin — A bank's spread between the interest it earns on loans and pays on deposits.
▼Net Profit Margin — Profit after all expenses and taxes as a percentage of total revenue.
▼O
OCF — Operating Cash Flow — Actual cash generated by a company's core business operations.
▼OCF/PAT Ratio — How much of reported profit is backed by real operating cash flow.
▼Operating Leverage — How sensitive a company's profits are to changes in its revenue.
▼P
PAT — Profit After Tax — A company's final net profit after all expenses and taxes are deducted.
▼PB Ratio — Price to Book — Share price divided by book value per share — price vs. balance sheet worth.
▼PE Ratio — Price to Earnings — Share price divided by EPS — how much investors pay per rupee of profit.
▼PEG Ratio — PE ratio adjusted for earnings growth rate — below 1 often signals value.
▼Piotroski F-Score — A 9-point financial health score separating strong from deteriorating companies.
▼P&L Statement — The income statement showing revenues, expenses, and profit over a period.
▼Pledge Ratio — The percentage of promoter-held shares used as collateral for personal loans.
▼Promoter Holding — The percentage of shares owned by the company's founding or controlling shareholders.
▼Q
Quick Ratio — A strict liquidity test excluding inventory from the current assets calculation.
▼R
Return on Assets — Net profit generated per rupee of total assets the company holds.
▼Revenue CAGR — Annualised compound growth rate of revenue over a multi-year period.
▼ROCE — Return on Capital Employed — Operating profit earned per rupee of capital invested in the business.
▼ROE — Return on Equity — Net profit earned per rupee of shareholder equity invested in the business.
▼S
SEBI — India's capital markets regulator, equivalent to the SEC in the United States.
▼W
WACC — Weighted Average Cost of Capital — The blended minimum return a company must earn to satisfy all its investors.
▼Working Capital — Current assets minus current liabilities — short-term operational liquidity.
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Every term in this glossary is taught in context in BBS courses — with full frameworks, real balance sheets, and step-by-step analysis.
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