Exercising Stock Options and Taxes

Exercising stock options, taxes, and when to exercise is very important for you to know before you even agree to sign the agreement letter. Stock options are a form of equity derivative that gives an investor the right (not obligation) to buy or sell the stock of the company in the future at an agreed-upon … Read more

Stock Options for Employees: ESO Explained

There are two main types of stock options, which are the standard exchange-traded stock option and the stock options for employees called the employee stock options (ESO). Over the course of employment, a company can issue stock options to employees. The ESO issued to employees can be exercised at a particular price that is set … Read more

Debt to EBITDA ratio formula and calculation

The debt to EBITDA ratio formula compares the debt of a company to its earnings before interest, taxes, depreciation and amortization. In the covenants for business loans, banks usually include a certain debt/EBITDA target. Hence, a company must keep up the agreed-upon level or be at risk of having the whole loan become due at … Read more

Return on assets formula: ROA calculation

The return on assets formula is an expression used to measure the amount of profit that is generated by a company from its assets. In finance, the ROA calculation is used to measure how efficient a company’s management is in earning a profit from the assets or economic resources on its balance sheet. This article … Read more

Stocks and shares differences and similarities

Stocks and shares are basic terms used by investors in the stock market. Although investors usually use these terms interchangeably, there is a difference between them. The term “stock” refers to an ownership interest in a publicly owned company while, the term “share” refers to the smallest denomination of a stock of a company. We … Read more

Authorized shares vs issued shares differences

Knowing the difference between authorized shares vs issued shares is essential in accurately calculating relevant ratios that portray the financial stability of a company. Authorized shares and issued shares are both issued by companies but have a significant difference between them. They both represent two different values of the total shares in the company. The … Read more

What is a tracking stock? examples and list

A tracking stock is issued by a parent company to track the financial performance of a particular segment or division. These stocks trade separately from the parent company’s stock in the open market. Therefore, it is traded at a price related to the operations of the specific division of the company being tracked. A tracking … Read more

Overvalued and undervalued stocks

There are different classes of stocks in the market but overvalued and undervalued stocks are the two types of stocks based on fundamentals. Stock fundamentals are the analysis of data apart from the trading pattern of stock that can impact the price of the stock. The essence of stock fundamentals is to predict and understand … Read more

Features of common stock

The common stock is a type of security, a form of corporate equity ownership. There are basic features of common stock that make the stock very popular among other stock types. Outside the United States, the term ordinary shares and voting shares are also used for this stock. While, in the UK and other commonwealth … Read more

How to determine if a stock is undervalued

In the stock market, the stocks that are undervalued are referred to as undervalued stocks. There are various ways to determine if a stock is undervalued in the stock market; the important thing to do is to carry out the needed research and use some financial metrics to evaluate the stocks. In this article, I … Read more