Some Important Definitions
Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.
Stock yield
With stocks, yield can refer to the rate of income generated from a stock in the form of regular dividends. This is often represented in percentage form, calculated as the annual dividend payments divided by the stock's current share price.
Earnings per share (EPS)
The EPS is the total profits of a company divided by the number of shares. A company with $1 billion in earnings and 200 million shares would have earnings of $5 per share.
Price-earnings ratio
A valuation ratio of
a company's current share price compared to its per-share earnings.
Calculated as:
For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95).
Outstanding shares
Stock currently held by investors, including restricted shares owned by the company's officers and insiders, as well as those held by the public. Shares that have been repurchased by the company are not considered outstanding stock.
Net current asset value per share(NCAVPS)
NCAVPS is calculated by taking a company's current assets and subtracting the total liabilities, and then dividing the result by the total number of shares outstanding.
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