Market jargon, decoded

The statement showing revenue, costs and profit over a period — a film of the year, not a photograph.

What a company owns and owes on one specific date. Assets always equal liabilities plus equity.

Where cash actually came from and went, split into operating, investing and financing.

Total value of goods and services sold in the period. Also called net sales or the top line.

What the goods that were actually sold cost to make or buy.

Operating profit before the cost of assets wearing out and before financing. A rough proxy for operating cash generation — not actual cash.

Operating profit after depreciation. The cleanest measure of what the business itself earns.

The bottom line — what's left for shareholders after every cost, including interest and tax.

Net profit divided by the number of shares. Your slice of the profit.

The annual accounting cost of physical assets wearing out. A real cost, but no cash leaves in that year.

Profit from outside the core business — interest on cash, rent, one-off gains. Above about a quarter of pre-tax profit, go and find out what it is.

A one-off gain or cost. Genuinely exceptional once; a pattern if it appears every year.

Cash actually generated by running the business. The single most important number in fundamental analysis.

CFO minus capital expenditure — cash genuinely available to owners after keeping the business running.

Cash spent on long-lived assets — plant, machinery, property.

Financials for the parent plus all subsidiaries combined. The default to use — it's what you actually own.

The parent company alone, excluding subsidiaries. Can hide losses sitting one level down.

The last four reported quarters added together — more current than the last annual report.

The section at the back of an annual report that explains the totals. Where contingent liabilities and related-party dealings live.

Gross profit as a percentage of revenue. The clearest measure of pricing power, and the first thing to fall when competition bites.

Operating profit (EBIT) as a percentage of revenue — how efficiently the business converts sales into profit.

Net profit as a percentage of revenue. What finally reaches owners.

Net profit divided by shareholders' equity — the return on owners' money. Can be inflated by borrowing.

Operating profit divided by all capital in the business. The best single measure of business quality.

After-tax operating profit over invested capital. Its purpose is one comparison: against the cost of capital.

Profit per rupee of assets. The standard quality measure for banks, where above 1.5% is strong.

Splitting ROE into margin × asset turnover × leverage, to see which of the three is producing the return.

Fixed costs staying flat as revenue grows, so profit grows faster than sales. It works just as hard in reverse.

The return investors require for the risk taken. Roughly 11–13% for a typical Indian business. Earn less than this and growth destroys value.

Share price × shares outstanding — what the whole company costs. Never judge by share price alone.

Price divided by earnings per share — the years of current earnings it would take to repay the price. A measure of expectation, not cheapness.

Market cap divided by shareholders' equity. Meaningful for banks and asset-heavy businesses; always read alongside ROE.

Market cap plus debt minus cash — what buying the entire business would really cost.

Enterprise value over EBITDA. The fair way to compare companies carrying different amounts of debt.

P/E divided by the earnings growth rate. A rough sanity check, only as good as the growth number you feed it.

Dividend per share divided by price. A very high yield usually means the market expects the dividend to be cut.

Valuing a business as the present value of the cash it will generate. Typically 60–75% of the answer sits in terminal value.

Running a DCF backwards: take the market price as given and solve for the growth it implies. Far more useful than forecasting.

The value of all cash flows beyond the explicit forecast window. Usually most of a DCF's output, and its weakest assumption.

The annual rate used to convert future cash into today's value. Higher for riskier businesses.

Assets minus liabilities on the accounting records. A record of what was spent, not an estimate of what things are worth.

What a business is genuinely worth given the cash it will produce. Always a range, never a single number.

A stock that is cheap for a good reason — a cyclical peak, a shrinking industry, a governance problem, or earnings that aren't real.

Total borrowings divided by shareholders' equity. Meaningless for banks, where leverage is the business model.

Operating profit divided by interest cost — how many times over profits can pay the interest bill. Below 2× is dangerous.

Total borrowings minus cash. What's really owed.

Reads directly as years of operating profit needed to clear the debt. Above 4× is dangerous territory.

Current assets divided by current liabilities — whether short-term obligations are covered by short-term resources.

An obligation that becomes real only if something happens — a guarantee, a disputed tax demand, a lawsuit. Sits in the notes, not on the balance sheet.

Money tied up in inventory and unpaid customer bills, less what's owed to suppliers.

DIO + DSO − DPO: how many days cash is locked up between paying suppliers and being paid. Negative is exceptional.

How many days customers take to pay. Rising sharply is one of the earliest warnings a business gives.

How many days stock sits before it sells. Rising means demand is slowing or stock is going stale.

A 0–9 score from nine yes/no financial-health tests. 8–9 signals improving fundamentals, 0–2 deterioration.

A statistical screen combining eight ratios to flag possible earnings manipulation. A pointer, never a verdict.

Business done with entities owned by the promoter or their family. The most common route by which cash quietly leaves a listed company.

An auditor formally stating that part of the accounts cannot be relied upon. Treat as a stop sign.

The steady annual rate that would take you from the starting value to the ending one. Hides every bump in between.

This quarter compared with the same quarter last year — the right comparison for seasonal businesses.

A huge growth percentage caused by an unusually weak comparison period rather than by genuine improvement.

ROE × retention ratio — how fast a company can grow from its own earnings before it must borrow or issue shares.

New shares being issued, making each existing share a smaller slice. Shows up as EPS growing slower than profit.

A structural reason competitors cannot take a company's profits — brand, switching costs, network effects, cost advantage, regulation, scale or distribution.

The premium paid above net asset value in an acquisition. Large and growing goodwill with flat returns means growth was bought expensively.

The founding family or controlling group of an Indian listed company.

Promoter shares given as loan collateral. If the price falls far enough, lenders sell them — turning a fall into a self-reinforcing collapse.

Overseas institutional money. Moves for global reasons as often as company-specific ones.

Indian mutual funds, insurers and pension funds. Stickier money than foreign flows.

Shares actually available to trade — total shares less promoter and locked-in holdings.

The quarterly disclosure of who owns the company, by category. One of the most information-dense free documents available.

Size bands by market capitalisation. In India, roughly the top 100 companies, the next 150, and everything below.

A business whose profits swing with a commodity price or the economic cycle. Looks cheapest at the peak.

A business driven by structural long-term demand rather than a cycle.

A bank's spread between what it earns on loans and pays on deposits. 3–4% is strong for a retail bank.

Loans a bank isn't being repaid on, before and after provisions. The number that matters most for a lender.

Share of a bank's deposits held in low-cost accounts. Above 40% is a genuine funding advantage.

Growth from stores open at least a year — retail growth stripped of new-store additions.

The four prices that summarise a bar. The close carries most of the information — it's where participants chose to hold overnight risk.

The period each bar covers. Higher timeframes set direction; lower ones set timing. Never the reverse.

A price axis where equal vertical distance means equal percentage move. Essential on any multi-year chart.

A bar whose high (or low) exceeds those of a fixed number of bars on either side. The building block of market structure.

The defining sequence of an uptrend. Its failure — a lower high, then a broken higher low — is the standard early warning.

Recent vocabulary for old ideas: a break confirming the trend, and the first break against it.

Prices where demand or supply has repeatedly appeared — because a cohort of participants built positions there and is now trapped by them.

Broken resistance becoming support (or the reverse), because the trapped cohort changes sides once price passes through.

Fast, wide, high-volume movement with the trend versus slow, overlapping, quiet movement against it.

Successively shallower and quieter pullbacks inside a base — the visual signature of supply exhausting.

A gap out of a completed base on heavy volume. A genuine repricing, and often never filled.

A gap late in an extended move, often on climactic volume — the last participants being drawn in.

A break beyond a level that fails and closes back inside. Often the pool of stop orders serving as exit liquidity for a large seller.

Price returning to a broken level after a breakout. A closer stop and a filter against traps, at the cost of missing the fastest movers.

Share of traded volume actually taken to delivery rather than squared off intraday — Indian-market data that separates position-taking from churn.

Running total of volume, added on up closes and subtracted on down closes. Its direction against a flat price is the signal.

Volume on up-close days divided by volume on down-close days. Above ~1.35 inside a range is strong evidence of accumulation.

Wyckoff's device for treating all large, informed buying and selling as one entity. A modelling simplification, not a conspiracy.

Volume is effort, price change is result. Heavy volume with no progress means absorption — accumulation at lows, distribution at highs.

Wyckoff's law that the size of a move is bounded by the size and duration of the preparation that preceded it.

A large buyer absorbing supply sideways over weeks or months, because buying quickly would destroy their own price.

Wide bar on exceptional volume that plunges and closes well off the low — panic selling met by large buying.

The sharp bounce after a selling climax, once sellers are momentarily exhausted. Its high defines the top of the trading range.

A return toward the climax low on lighter volume, confirming supply has diminished.

A brief poke below range support that recovers within a few sessions and is never undercut — the shakeout that clears the last stops.

A decisive advance through range resistance on expanding volume and widening spread. The breakout, in Wyckoff terms.

The pullback after an SOS that holds above old resistance — polarity flip confirmed, and the second low-risk entry.

A large holder selling into strength over time — accumulation in reverse, but slower and noisier.

Wide bar on enormous volume that surges and closes well off the high — maximum enthusiasm meeting maximum supply.

The spring's mirror: a break to a new high that fails, trapping breakout buyers and providing final exit liquidity.

A weak rally failing well below the range high on poor volume — demand exhausted.

A decisive break below range support on expanding volume. Markdown begins.

A pause inside an existing advance where supply is absorbed at higher prices. Visually identical to distribution — only volume separates them.

Weinstein's four states — base, advance, top, decline — identified by price versus a 30-week moving average and that average's slope.

The moving average at the centre of stage analysis, roughly equal to the 150-day. Its slope is what distinguishes stage 2 from a stage 4 rally.

Averages of recent closes, equally or exponentially weighted. Neither is better; the EMA turns faster and whipsaws more.

The 50-day crossing above (or below) the 200-day. A lagging regime statement, not an entry — it fires long after the move began.

The proportion of recent movement that has been upward. Above 70 describes strength, not an imminent reversal.

Price making a new extreme while an oscillator does not. Can repeat indefinitely and supplies no invalidation level — a risk cue, never an entry.

The gap between a fast and a slow exponential average. Its histogram is more informative than its crossovers.

Trend strength without direction. Below 20 means trend-following tools will whipsaw.

Typical bar movement including gaps. The one indicator that should change your position size.

Stock price divided by a benchmark index. Its direction shows whether capital is choosing this over the alternatives.

Leading, weakening, lagging and improving — sectors tend to rotate clockwise through them. The sequence is real; the timing is noisy.

Profit or loss expressed in units of the amount risked. Makes outcomes comparable across instruments and position sizes.

(win rate × average win) − (loss rate × average loss), in R. The number that decides whether a method makes money — win rate alone does not.

Shares = (account × risk%) ÷ (entry − stop). The stop comes from the chart; the size is computed from it, never the reverse.

Total risk across all open positions. Capping it — around 6% is common — stops a correlated shock from taking several positions at once.

A stop moved up under structure or at a multiple of ATR as a trade advances. By construction it gives back part of every open profit.

The broad environment — index trend, breadth, volatility — that decides whether a given setup has positive or negative expectancy.

How many stocks participate in a move. A rising index with narrowing breadth is the classic late-cycle configuration.

Testing on today's index constituents, which were selected for having survived — building the answer into the question.

Data the rules were never developed on. A result that only works on the development period is fitted noise.