The 60-Second Answer: How to Calculate EBIT (and What Most Guides Get Wrong) If you want to know how to calculate EBIT, the shortest correct answer is: EBIT equals earnings before interest and taxes. Practically, you can derive it two…
How to Calculate EPS Growth: The Core Formula and Why Annual Rates Matter If you want to know how to calculate EPS growth, start with the earnings per share (EPS) figure itself. The formula for calculating EPS is net income…
The Core Formula for Calculating Enterprise Value If you take away one thing from this guide, it’s this: the formula for calculating EV is market capitalization plus total debt, minus cash and equivalents, plus preferred equity and minority interest. For…
How to Calculate Risk Premium: The Practitioner’s Short Answer To calculate risk premium, subtract the risk-free rate from the expected return of a risky asset. For the broad market, the S&P 500 risk premium equals the index’s expected return minus…
The Straight Answer: Core Formulas and How I Use Them If you need the bottom line first: the most common way to calculate cost of equity is the Capital Asset Pricing Model (CAPM), expressed as Rf + β(Rm − Rf).…
Maximum drawdown (MDD) is the largest percentage drop from a peak to a subsequent trough in any value series. The formula is MDD = (Peak – Trough) / Peak, expressed as a negative or absolute percentage. To calculate it, you…
Two Meanings Of ‘Drawdown’ And The Basic Calculation To calculate portfolio drawdown, apply this formula at any point t: Drawdown_t = (Peak_t − Value_t) / Peak_t, where Peak_t is the highest portfolio value observed up to that moment. This is…
The Straight Answer: How to Calculate Bond Yield (and What a 10-Year Bond Yields Today) If you need the core math right now, here it is: for a coupon-paying bond, the simplest yield is current yield = annual coupon ÷…
The Straight Answer: How to Calculate a Bond Coupon Payment If you want to know how to calculate bond coupon payment for any bond, use one line: face value × (annual coupon rate ÷ payments per year). That gives the…
The Straight Answer on Growth vs Value Stocks: Which Is Better? If you’re asking “growth vs value stocks which is better,” the honest answer is that neither style wins permanently. In my 15 years managing institutional portfolios, the mistake I…