Glossary

A measure of operating profitability that strips out non-operating costs and non-cash expenses. Often used as a proxy for cash earnings before capital structure choices and tax jurisdiction.

EBITDA with management-defined add-backs — typically stock-based compensation, restructuring charges, M&A costs, and other items deemed non-recurring. A non-GAAP metric that often paints a more favorable picture than reported EBITDA; check the reconciliation footnote.

EBITDA ÷ Revenue. The percentage of revenue that survives operating costs, excluding D&A. Useful for cross-comparing businesses with different capital intensity since it strips out depreciation choices.

Net Income ÷ Diluted Shares Outstanding. Earnings per share assuming all dilutive securities (options, RSUs, convertible notes) are exercised. The conservative EPS figure most investors anchor on.

Operating profit — revenue minus operating costs (COGS + SG&A + R&D + depreciation/amortization). The line above interest expense and tax on the income statement.

Direct costs of producing the goods or services sold during the period — materials, direct labor, and directly allocated manufacturing or fulfillment costs. Excludes SG&A and R&D.

Operating expenses outside of direct production costs — sales commissions, marketing, executive compensation, corporate overhead. Indirect costs of running the business.

Expenditure on developing new products, services, or technologies. Expensed (not capitalized) under US GAAP. A high R&D/revenue ratio signals investment in future products.

Total of SG&A + R&D + depreciation and amortization. Costs incurred to run the business excluding direct production costs and non-operating items.

Spending on long-lived assets — property, equipment, software, infrastructure. Capitalized on the balance sheet and depreciated over the asset’s useful life rather than expensed immediately.

(Revenue − COGS) ÷ Revenue. The percentage of each revenue dollar that survives direct production costs. A core indicator of unit economics and pricing power.

Operating Income ÷ Revenue. The percentage of revenue left after all operating costs (COGS, SG&A, R&D, D&A) but before interest and tax.

Net Income ÷ Revenue. The percentage of revenue that becomes bottom-line profit after all costs — operating, interest, and tax.

Long-lived tangible assets used in operations — buildings, manufacturing equipment, vehicles, fixtures. Carried on the balance sheet at cost less accumulated depreciation.

Amounts owed to the company by customers for goods or services already delivered but not yet paid for. Rising AR relative to revenue can indicate collection issues.

Amounts the company owes to suppliers for goods or services already received but not yet paid for. Effectively short-term, interest-free financing from vendors.

Current Assets − Current Liabilities. Working capital needed to fund day-to-day operations. Negative NWC is not always bad — common in subscription and high-velocity retail businesses.

The premium paid in an acquisition above the fair value of the target’s net identifiable assets. Carried as an intangible on the acquirer’s balance sheet; tested annually for impairment.

Sum of short-term debt + long-term debt + capital lease obligations. The full interest-bearing obligation stack — what the company has to repay or refinance.

Total Debt − Cash and Equivalents. The debt position adjusted for the company’s ability to pay it down with on-hand cash. Negative net debt = net cash position.

Cash and Equivalents + Short-Term Investments − Total Debt. The mirror of Net Debt — when the company holds more liquid assets than interest-bearing obligations, it is in a net cash position. Common in mature tech and cash-generative consumer franchises.

Total Debt ÷ TTM EBITDA. A leverage indicator measuring how many years of operating cash earnings would be needed to retire all debt. Investment-grade names typically run below 3x; covenant-breach thresholds often sit at 4–5x.

Operating Cash Flow − Capital Expenditure. The cash a company generates after funding the investment needed to maintain or grow its asset base. Available for dividends, buybacks, debt paydown, or accumulation.

Cash generated by core operations during the period, before investing and financing activities. Reconciles net income to actual cash via working capital and non-cash adjustments.

Free Cash Flow ÷ Market Cap (or Enterprise Value). The cash earnings yield on the company’s equity (or enterprise) value. A core comparable across businesses with different capital structures.

Free Cash Flow ÷ Net Income. The percentage of accounting earnings that translates into actual cash. Sustained values below 100% can flag working-capital drag or persistent capital-expenditure needs.

Stock price ÷ earnings per share. The earnings multiple — how many years of current earnings the market is willing to pay for the equity. TTM (trailing) uses the last 12 months; forward uses the next 12 months’ estimated EPS.

Stock price ÷ next-twelve-months estimated earnings per share (consensus). Compares current price to forward earnings rather than trailing.

P/E ÷ the expected annual growth rate of earnings per share. It sets the P/E beside the growth analysts expect.

Market Cap + Total Debt − Cash. The takeover value of the entire business — equity plus what an acquirer would have to assume in debt, less the cash it would inherit. Used in EV/EBITDA and EV/Revenue multiples.

Enterprise Value ÷ TTM EBITDA. Capital-structure-neutral cash earnings multiple. A core cross-comparable across companies with different leverage and tax profiles.

Enterprise Value ÷ TTM Revenue. A revenue multiple that adjusts for capital structure. Most useful for early-stage or unprofitable companies where P/E and EV/EBITDA are not meaningful.

Market Cap ÷ Book Value of Equity. How much the market values the equity above its accounting book value. Most informative for asset-heavy and financial-sector businesses.

Market Cap ÷ TTM Revenue. A revenue multiple. Often used when comparing growth companies that are not yet profitable, so P/E cannot be calculated.

A valuation method that discounts future free cash flows back to present value using a required rate of return. The “fundamental” valuation approach — sensitive to terminal value and discount rate assumptions.

The discount rate at which a series of cash flows nets to zero present value. The implied compound annual return on an investment given an entry price and expected cash flows.

The sum of future cash flows discounted to present value, less the initial investment. Positive NPV at the chosen discount rate implies the project clears the hurdle.

Net Income ÷ Average Total Assets. How efficiently a company generates earnings from its asset base. Useful for cross-comparing capital-intensive businesses.

Net Income ÷ Average Shareholders’ Equity. The return earned on shareholder capital. High ROE can come from genuine operating efficiency or simply from heavy leverage.

Trailing 12-month earnings per share divided by book value per share. The Snapshot works it out this way from market data, so it can differ slightly from a return on average equity in a filing.

NOPAT ÷ Invested Capital. Return on the total capital base (debt + equity) the company has deployed in the business. Often compared to WACC to assess economic value creation.

EBIT ÷ Capital Employed (Total Assets − Current Liabilities). Pre-tax operating return on the long-term capital deployed. Useful for cross-comparison across tax jurisdictions.

The sensitivity of a stock’s returns to the market’s returns. Beta above 1 implies higher volatility than the market; beta below 1 implies lower. Calculated over a trailing window, typically one to five years.

Return in excess of what a risk-adjusted benchmark would predict. Active management’s measure of skill — alpha > 0 implies value added beyond passive market exposure.

Comparison of a period’s value to the same period in the prior year — e.g., Q2 FY26 versus Q2 FY25. Cleanest comparison for businesses with seasonality.

For a bank: net revenue in the latest quarter against the same quarter a year earlier. Net revenue is net interest income plus noninterest income, what the bank earns after the interest it pays on deposits and borrowings. Gross revenue counts the interest it receives before that cost.

Comparison of a quarter’s value to the immediately prior quarter — e.g., Q2 versus Q1. Captures sequential momentum but can be misleading when seasonality is strong.

The annualized rate at which a value would have grown if it compounded at a constant rate each year over the period. Smooths out lumpy year-to-year changes.

Comparison of a month’s value to the immediately prior month. Captures short-term momentum; rarely meaningful for quarterly reporters.

The annual SEC filing for US-listed companies. Comprehensive: audited financials, MD&A, risk factors, executive compensation, business overview. Filed within 60–90 days of fiscal year-end.

The quarterly SEC filing for US-listed companies. Lighter than the 10-K — unaudited financials, MD&A updates, and material changes. Filed within 40–45 days of quarter-end.

An interim SEC filing disclosing material events between quarterly reports — acquisitions, leadership changes, bankruptcy, material agreements, results of shareholder votes. Filed within 4 business days of the event.

The annual proxy filing disclosing executive compensation, board nominees, and matters for shareholder vote at the annual meeting. The primary public source for compensation and governance detail.

The initial registration statement filed with the SEC by a company going public. Contains the IPO prospectus — business overview, risk factors, financials, use of proceeds.

A document filed ahead of a shareholder vote, describing the matters to be voted on and the parties soliciting votes. The annual version (DEF 14A) is the most common.

The narrative section of 10-K and 10-Q filings where management explains results in its own words. The primary source for narrative drift analysis — what management is emphasizing versus what the numbers show.

Shares Outstanding × Current Share Price. The market’s valuation of the equity. Large-cap is typically above $10B; mid-cap $2–10B; small-cap $300M–$2B; and micro-cap below that.

Shares available for trading in the public market — total shares outstanding less restricted shares held by insiders, affiliates, and large strategic holders. A small float can amplify price volatility.

Total shares of stock currently issued by the company and held by all shareholders — public and insider. The denominator in market cap and EPS.

The highest price at which the security has ever traded since its IPO. Often referenced as a psychological resistance level.

The lowest price at which the security has ever traded since its IPO. The mirror of ATH.

The lowest and highest prices at which the security has traded over the trailing 52 weeks. A standard reference window for assessing where the current price sits relative to recent volatility and trend.

The simple average of the security’s closing price over the trailing 50 trading days. A short-to-intermediate trend indicator — price above the 50-day MA is often read as constructive momentum.

The simple average of the security’s closing price over the trailing 200 trading days. The canonical long-term trend marker — price above the 200-day MA is the conventional definition of an uptrend.

Annualized Dividends Per Share ÷ Current Share Price. The income yield component of equity return. Sustained yields above sector medians often signal payout-funded returns to shareholders rather than growth reinvestment.

Dividends ÷ Net Income, trailing twelve months. The share of earnings paid out as dividends. For a bank, read it beside the capital it must hold: a high ratio leaves less for buybacks and growth.

The first sale of a company’s stock to public investors. Marks the transition from private to publicly traded, accompanied by an S-1 registration statement.

The combination of two companies (merger) or the purchase of one by another (acquisition). A category of corporate activity disclosed via 8-K when material.

A shell company that goes public via IPO with the intent of acquiring a private operating company within a fixed window, taking it public via the merger. Also called a “blank-check” company.

The companies you hold. Sentia tracks which companies are in a portfolio — tickers only. It never records balances, share counts, cost basis, allocation weights or returns.

Companies you are researching but do not necessarily own. Drift scores and briefs work the same way as for a portfolio; the difference is why the name is on the list, not what Sentia does with it.

A 0–100 measure of alignment between management’s stated narrative and the company’s reported fundamentals over a recent window. Lower scores indicate widening gaps between what management says and what the filing data shows.

Sentia-extracted themes tracked across consecutive filings, each marked Improving, Stable, Declining, Escalating, or New. The change in stance — not just the theme itself — is the signal.

A side-by-side comparison of management’s framing of a theme in the prior period versus the current period. Surfaces shifts in emphasis, hedging language, and concessions.

Sentia’s quarterly summary of what changed materially in management’s narrative, with source attribution to specific filings. Designed to read in under 90 seconds.