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Glossary

Glossary

Every metric MoatLens shows is explained inside the app. Here are the same explanations to read at your own pace — in everyday language, without jargon, with the MoatLens tip on what actually matters.

Price-Earnings Ratio (P/E)Imagine buying the whole company: the P/E says how many years of current profit you pay for at today's price. …Price-to-Book Ratio (P/B)The P/B compares the market value to the equity on the balance sheet – the „book value". Roughly: what would b…Return on Equity (ROE)ROE shows how much profit a company makes from its owners' money (the equity). 20 % means: €100 of equity prod…Debt load (Net debt / EBITDA)Shows how many years of operating profit (EBITDA) it would take to pay off net debt. 2 means: about two years …Net MarginOf every euro of revenue – how much is left at the end as real profit? 20 % means €100 of revenue turns into €…Dividend YieldShows the annual payout relative to the price. 3 % means €3 of dividend per €100 of price.…Revenue GrowthShows how much revenue grew versus the prior year – the fuel for future profit.…Earnings GrowthShows how fast real profit grows, not just revenue. Ideally it keeps pace with revenue or beats it.…Free Cash FlowThe money truly left after all running costs and investments, free to be used. Often more honest than reported…Market CapitalizationThe total stock-market value of a company: share price × total number of shares. Answers „What does the whole …Gross marginOf every dollar of revenue — how much is left once only the direct cost of making the product is subtracted? 6…Operating marginOf every dollar of revenue — how much is left as profit from the actual business, before interest and taxes? 1…EBITDAProfit before interest, taxes and depreciation are subtracted. Intended as a rough approximation of how much c…Operating cash flowThe money that actually arrives in the till from the ongoing business — before anything is invested. Not the p…Cash conversionHow much of the accounting profit actually arrives as real, freely usable cash. 85% means: $100 of reported pr…Owner earningsThe money an owner of the business could withdraw each year without weakening it. In other words, profit minus…Capital expenditureThe money a company spends on factories, machines, software or buildings. Often shortened to capex.…Return on invested capital (ROIC)How much profit a company earns on all the capital tied up in the business — its own and borrowed money togeth…Share buybackThe company buys its own shares on the market and retires them. Fewer shares remain — your slice of the busine…DilutionThe company issues new shares, usually as employee compensation. The share count rises — your slice of the bus…GoodwillWhat was paid in an acquisition above the value of the tangible things — for the brand, the customer base, the…DepreciationA machine costs $10 million today and lasts ten years. Instead of booking the whole cost at once, the company …Adjusted figures & one-off itemsThe company shows two profits: the one calculated by the rules — and an "adjusted" one, with one-time charges …MoatA durable advantage that makes it hard for competitors to take a company's customers and profits. A strong bra…Pricing powerThe ability to raise prices without customers walking away. Arguably the clearest evidence of a moat.…Switching costsThe effort a customer would face in moving to a competitor. Not just money — time, relearning, risk, lost data…Network effectA service becomes more valuable to every user the more people use it. A marketplace with many buyers attracts …Recurring revenueRevenue that returns on its own — subscriptions, maintenance contracts, consumables. The opposite is the one-o…Organic growthGrowth from a company's own efforts — more products sold, higher prices, new customers. Not the growth that ap…Net debtAll debt combined, minus the cash the company already holds. If it holds more cash than debt, the figure is ne…ProvisionsMoney the company sets aside for obligations that are certain or likely to come, but whose exact size is still…Working capitalThe money tied up in day-to-day operations: in inventory and in invoices customers have not yet paid — minus w…AcquisitionsThe company buys another company or a business unit — products, customers and employees in one go, rather than…Debt repaymentDebt repayment means: the company pays back the debt it took on – not the interest, which runs separately, but…Capital allocationCapital allocation means: what does the company do with the money it earns? Invest wisely, pay down debt, make…Business modelThis rating looks at the resilience of the business model – how predictable, simple and crisis-proof the busin…ManagementThis rating looks at how honest and capable the leadership is – judged from what the annual report says.…Structural risksThis rates structural risks that go beyond the pure metrics and only become visible in the annual report.…ValuationValuation describes how expensive a stock currently is relative to what the company is actually worth (measure…Capital returnCapital return shows how much money a company gives back to its shareholders through dividends and share buyba…
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