# Investing for Beginners .EU, investing

 A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.Mark Twain

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European Dividend Stocks
Before getting to the exact stocks, at first, please let me explain why I have chosen European dividend stocks as a topic. For the beginning, lets solve the question why dividend stocks. The true is that many inv
http://www.investingforbeginners.eu/european_dividend_stocks-p0-i22

Sortino Ratio
Sortino ratio is a financial ratio that is used to measure the performance of investment portfolio and is very similar to a Sharpe ratio. The main difference between Sortino ratio and Sharpe ratio is that Sharpe
http://www.investingforbeginners.eu/sortino_ratio

Terminal Value
Terminal value is a value of the business (or other asset) used in discounted cash flow (DCF) method that is added after the discontinuing of the cash flow forecasting.   DCF valuation is based on the sum
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Investment in Swaps
Swaps - an investment tool used rarely at investing process. Typically, these contracts are used by financial institutions or other big companies in order to exchange cash flows in different currencies. In fact,
http://www.investingforbeginners.eu/investment_in_swaps

Jensens Alpha
Jensen’s alpha is used to measure the performance of an investment portfolio. The higher ratio means better performance of portfolio manager. Basically, this Jensen’s ratio shows the above market port
http://www.investingforbeginners.eu/jensens_alpha

P/E Ratio
P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im
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Relative Valuation
Comparative analysis    Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi
http://www.investingforbeginners.eu/relative_valuation

Purchasing power parity (PPP) is economical term used to compare purchasing power of the same currency (USD) in different countries.    The principle is that for the same \$1000 you may buy different a

Price to Free Cash Flow
Price to free cash flow (P/FCF) or EV/FCF ratio are ratios that compare company's price to its free cash flow. The main difference between those two ratios is that EV/FCF also includes the eff
http://www.investingforbeginners.eu/price_to_free_cash_flow

Price to Cash Flow Ratio
Price to cash flow ratio (P/CF) and EV/CF ratio are similar but there are some differences. The main difference is that EV/CF also includes the effect of company’s financial debt which says a different
http://www.investingforbeginners.eu/price_to_cash_flow_ratio

Free Cash Flow Yield
Free cash flow yield (FCF yield) show how much of cash that may be distributed to shareholders the business earns compared to its price on the stock exchange (including both: equity value and debt value or just e
http://www.investingforbeginners.eu/free_cash_flow_yield

NOPAT
NOPAT (‘net operating profit after tax’ or ‘after tax operating profit’) is equal to operating profit less taxes. It is adjusted by tax rate because the part cost of debt which is part of
http://www.investingforbeginners.eu/nopat

Rate of Return
A rate of return is a percentage that shows what is the profit or loss gained on some investment on annual basis. There are many ways to calculate the rate of return including internal rate of return, arithmetica
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Return on Invested Capital
Return on invested capital (ROIC) or also called return on capital is a financial ratio employed to measure nominal company’s return that is earned by capital invested in operating asset. Basically return o
http://www.investingforbeginners.eu/return_on_invested_capital

CFROI
CFROI or cash flow return on investment is a rate of return that measures the performance of corporation based on its cash flow generation ability. CFROI is not very popular but is still used by some companies an
http://www.investingforbeginners.eu/cfroi

Capital Employed
Capital employed is a value of capital investments in a company. Basically, the capital of each company can be classified in these types of capital: Equity capital  Debt capital Working capital
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Current Ratio
Current ratio is a financial ratio that measures company’s financial liquidity in short term. In simple words, this ratio compares company’s short-term assets to its short term liabilities. If short-t
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Return on Capital Employed
Return on capital employed ratio (ROCE) measures company’s return compared to its employed capital. Return in this case is some kind of profit (mostly EBIT or NOPAT) and the capital employed means equity ca
http://www.investingforbeginners.eu/return_on_capital_employed