Insights archive

Net Profit Margin

Net Profit Margin: Meaning, Formula, and Interpretation

Net profit margin is a key financial metric that provides insights into a company's profitability. It measures the percentage of net income relative to total revenue, indicating the portion of revenue that remains as profit after accounting for all expenses and taxes.

Inventory Turnover Ratio

Inventory Turnover Ratio: What It Is, Formula, and Interpretation

The world of business is intertwined with plenty of terminologies and financial ratios that are used to evaluate a company's performance and its efficiency in managing assets. One of these is the "Inventory Turnover Ratio".

Return on Equity

Return on Equity (ROE): The Key to Assessing Shareholder Returns

Return on Equity (ROE) is a key financial ratio that measures the profitability and efficiency of a company in generating returns for its shareholders. It provides insights into how effectively a company utilizes shareholder equity to generate profits.

Market Analysis - Understanding Trends, Risks, and Opportunities

Market Analysis: Trends, Risks, and Opportunities

In this article, we will explore how market analysis is used within investing, and the four types and five dimensions of market analysis.

Investor and the Wallenberg family - A century of influence and success

Business Philosophy

Investor: A Century of Success and Influence

Investor, often referred to as the Swedish Berkshire Hathaway, was established in 1916 and has emerged as the largest Swedish investment company with an enormous impact on the Swedish economy.

Operating Margin

Operating Margin: A Key Profitability Metric

Operating margin is a crucial financial ratio that measures a company's operating profitability. It assesses the proportion of operating income relative to total revenue, providing insights into the company's ability to generate profits from its core operations.

Industry Analysis - How to identify lucrative sectors

Industry Analysis: Identifying Lucrative Sectors

This article seeks to explain what industry analysis entails, its significance, the main purpose it serves, and the five important aspects that make up a comprehensive industry analysis.

Margin of Safety - A term coined by Benjamin Graham

Margin of Safety: Protecting Your Investments

Margin of safety provides a cushion against unforeseen events and market fluctuations, protecting investors from significant losses. This article explains what margin of safety means, the formula to calculate it, the significance of a 30% margin of safety, and why a high margin of safety is considered beneficial.

Value Investing - Warren Buffett and Charlie Munger - The Oracle from Omaha

Value Investing: Finding Hidden Gems

In this article, we will explore the concept of value investing, its key principles, Warren Buffett’s strategy, and provide examples of typical value stocks that have yielded impressive returns.

Return on Assets - ROA

Return on Assets (ROA): Evaluating Asset Performance

Return on Assets (ROA) is a financial ratio that measures a company's ability to generate profits from its assets. It provides insights into how efficiently a company utilizes its assets to generate earnings.

Constellation Software's Mark Leonard looking out over the Toronto skyline and the constellation of stars

Business Philosophy

Collection: Mark Leonard's Shareholder Letters

The complete collection of Mark Leonard's Constellation Software Shareholder Letters (2007-2021).

EBITDA Margin

EBITDA Margin: A Common Profitability Metric

EBITDA margin is a financial metric that provides insights into a company's profitability and operating efficiency. It measures the percentage of earnings before interest, taxes, depreciation, and amortization (EBITDA) relative to total revenue.

Valuation Metrics - P/E, EV/EBIT, and how to use them!

Valuation Metrics: Estimating the Worth of a Company

In this article, we will explore key valuation ratios, discuss the best metric for valuing a company, define valuation matrices, and determine what constitutes a good valuation ratio.

Gross Margin

Gross Margin: Calculations and Analysis

Gross margin is a key financial ratio that provides insights into a company's profitability at the gross profit level. It helps stakeholders understand the portion of revenue remaining after deducting the direct costs associated with producing goods or providing services.

Enterprise Value - How to calculate it!

The Importance of Enterprise Value

Enterprise value (EV) provides a comprehensive assessment of a company's total value, taking into account its market capitalization, debt, and cash. In this article, we will explain the concept of enterprise value, how it is calculated for both public and private companies, and the use of EV/EBIT ratio as a valuation metric.

Operating Leverage

Operating Leverage: A Game-Changer for Financial Success

Operating leverage is a financial concept that measures the impact of fixed costs on a company's profitability. This article seeks to explain the concept of operating leverage, its formula, and whether high or low operating leverage is preferable.

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