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The Price-to-Earnings Ratio
The most quoted number in equities, and the most misread. It compares price to one year of profit and says nothing at all about the years after it.
Foundations5 min read
Valuation
Dividends: Yield, Payout and Safety
A dividend is a discretionary distribution. The yield is trivially calculated and the interesting question is always whether the company can keep paying it.
Foundations5 min read
Valuation
Gross, Operating and Net Margin
Margins convert absolute profit into a rate, which is what makes companies of different sizes comparable. Each of the three answers a different question.
Foundations4 min read