Glossary
Financial terms, plainly explained
Plain-English definitions of the financial metrics, ratios, and concepts you'll meet across Quant Auras.
Asset Turnover
Revenue divided by average total assets — sales generated per dollar of assets.
Bear Market
A sustained decline of 20% or more from a recent peak.
Beta (β)
How much a stock moves relative to the broader market.
Bid-Ask Spread
The gap between the highest buy price and the lowest sell price for a security.
Bull Market
A sustained rise of 20% or more in a major index from a recent trough.
Correlation
The degree to which two assets' returns move together, on a scale from −1 to +1.
Current Ratio
Short-term assets divided by short-term liabilities.
Debt-to-Equity (D/E) Ratio
Total liabilities divided by shareholder equity.
Dividend
A cash or stock distribution paid by a company to its shareholders.
Dividend Yield
Annual dividend per share divided by current share price.
Earnings Per Share (EPS)
Net income allocated to each outstanding common share.
Enterprise Value (EV)
The theoretical takeover price of a firm — equity value plus net debt.
EV / EBITDA
Enterprise value divided by earnings before interest, tax, depreciation, and amortisation.
Exchange-Traded Fund (ETF)
A basket of securities that trades on an exchange like a single stock.
Free Cash Flow (FCF)
Cash from operations minus capital expenditures.
Gross Margin
The percentage of revenue left after the direct cost of producing what was sold.
Index Fund
A fund that mechanically tracks a market index rather than picking stocks actively.
Initial Public Offering (IPO)
The first sale of a company's shares to the public, taking it from private to listed.
Interest Coverage Ratio
Operating profit divided by interest expense — a direct read on debt-servicing capacity.
Limit Order
An instruction to buy or sell only at a specified price or better.
Market Capitalisation
Total dollar value of a company's outstanding shares.
Market Maker
A firm that continuously quotes both a buy and a sell price, providing liquidity.
Market Order
An instruction to buy or sell immediately at the best available price.
Net Margin
Net income as a percentage of revenue — the bottom-line profitability headline.
Nomu Parallel Market
Tadawul's lighter-regulation parallel market for smaller, growth-stage Saudi companies.
Operating Margin
Operating income as a percentage of revenue — profitability before interest and tax.
PEG Ratio
P/E ratio divided by the expected annual earnings growth rate.
Price-to-Earnings (P/E) Ratio
How much investors pay per dollar of company earnings.
Return on Assets (ROA)
Net income as a percentage of total assets.
Return on Equity (ROE)
Net income as a percentage of shareholder equity.
Shares Outstanding
The total number of a company's common shares currently held by all shareholders.
Short Selling
Selling borrowed shares with a view to repurchase later at a lower price.
Tadawul (Saudi Exchange)
The sole official stock exchange in Saudi Arabia and the largest by market cap in the GCC.
Volatility
How much an asset's price fluctuates over time — usually annualised standard deviation of returns.
Weighted Average Cost of Capital (WACC)
Blended after-tax cost of a firm's debt and equity — the standard DCF discount rate.