Common Stock Market Terms and Ratios

A collection of stock market terms used to help me learn more about investing

Average Volume

The average number of shares traded per day; usually proportional to the stock’s market cap, which indicates its liquidity

Short Float

The percentage of shares sold short; indicates a bearish sentiment

Relative Volume

The ratio of a stock’s current volume compared to its 3-month average

Current Volume

The number of shares of a stock that were traded today

Float

The amount of shares available for trading (doesn’t include shares held by insiders); High-float stocks are best for long-term investment

Trades

The number of trades today; different from the current volume since it measures individual trades and not the total volume

Price to Earnings Ratio (P/E)

The price of a single stock divided by its earnings; lower means a better deal

Price to Cash Ratio (Price/Cash)

The price of a single stock divided by cash per share; under 10 indicates an undervalued stock

EPS Growth (Earnings Per Share)

A company’s net income divided by the number of shares outstanding; a 5% growth or more annually indicates good profits

Sales Growth

How much a company has been able to increase their sales of a period of time; At least 5-10% is good

Current Ratio

A company’s current assets divided by its current liabilities; Over 1 is good