## Glossary

### Return on Equity

Net Income divided by Equity. Also known as ROE or Return Over Equity. It provides a view of the return to the shareholder, already including the effects of all costs and expenses of the operation, including financial leverage and taxes. For this same reason, it is difficult to compare companies with different levels of financial leverage and/or companies operating in industries with different tax burdens.

### Return on Invested Capital

Operating Profit (Profit before Taxes and Interest) divided by the average of (Equity + Long- and Short-Term Loans and Financing). Because it uses Earnings Before Interest and Taxes in the numerator and includes debt providers in the denominator, it is typically used to compare companies with different levels of financial leverage and/or tax burdens than Return on Equity.

### Return on Tangible Capital

Operating Profit (Earnings Before Interest and Taxes) divided by the average of (Total Assets - Intangible Assets - Cash and Cash Equivalents - Current Liabilities excluding loans). Provides a measure of return on all tangible capital invested in the company. Excludes intangible assets and assets that are not invested in the operation, to make companies with very different levels of cash (whose surplus is probably not invested in the operation) and intangible assets (whose measurement is subject to subjective and/or particular factors of each company) more comparable. In this aspect, it allows a better comparison than the Return on Invested Capital for companies with very different levels of cash and/or intangible assets.### Return on Assets

Net Income divided by Total Assets. Also known as ROA or Return Over Assets.

### Net Margin

Net Income divided by Net Revenue. Also known as Net Margin.

### Gross Profit

Gross Profit is Net Revenue minus the cost of goods sold and/or services provided.

### Gross Margin

Gross Profit divided by Net Revenue. Also known as Gross Margin.

### EBIT or Earnings Before Interest and Taxes

EBIT is Earnings Before Interest and Taxes (Operating Profit).

### EBIT Margin

EBIT divided by Net Revenue. Also known as EBIT Margin.

### Asset Turnover

Net Revenue divided by Total Assets. Also known as Asset Turnover.

### Financial Leverage

Total Asset Value divided by Equity. It is equivalent to (Debt/Equity) + 1. Also known as Financial Leverage.

### Debt/Equity

Total liabilities divided by Equity. It is equivalent to (Financial Leverage - 1).

### P/E

Stock price divided by Net Income per share. Also known as P/E or Price/ Earnings.

### P/BV

Stock price divided by Book Value of Share (BV). BV is defined as Net Equity divided by the total number of shares of the company. Also known as P/B or P/BV or Price/Book Value.

### P/Net Revenue

Share price divided by Net Revenue per share, where Revenue is Net of taxes and returns on Gross Revenue. Also known as P/S or Price/Sales.

### P/FCF

Share price divided by Operating Cash Flow per share. The FCF does not include cash flows from either investing or financing activities.

### P/FCF

Share price divided by FCF per share. FCF or Free Cash Flow is the company's free cash flow, defined as FCO (Operating Cash Flow) minus CapEx or Capital Expenditures, investment in the company's fixed assets. Not all companies disclose the CapEx value separately in their standardized financial statements and, therefore, in these cases, this measure is not reliable.

### P/EBIT

Share price divided by EBIT per share. EBIT or Earnings Before Interest and Taxes is the Earnings Before Interest and Taxes (Operating Profit).

### P/NCAV

Share price divided by Net Current Asset Value per share, where Net Current Asset Value is defined as current assets minus total liabilities per share.

### P/Total Assets

Share price divided by total assets per share.

### P/Working Capital

Share price divided by working capital per share, where working capital is defined as current assets minus current liabilities.

### EV/EBIT

EV or Enterprise Value is the total value of the company, defined as the sum of the Market Cap (market value) with the value of the net debt of cash. EBIT or Earnings Before Interest and Taxes is the Profit before Interest and Taxes (Operating Profit).

### EV/EBITDA

EV or Enterprise Value is the total value of the company, defined as the sum of the Market Cap (market value) with the value of the net debt of cash. EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortization is the Profit before Interest, Taxes, Depreciation and Amortization (LAJIDA).

### Dividend Yield

Cash dividends paid per share (including interest on equity) divided by the share price. It is a measure that can be easily compared with some investment with "fixed income" characteristics, obviously assuming constant share price and dividend yield.

### Financial Volume

Financial volume in currency traded daily. The website usually shows the daily average of the last 90 days, since the volume can vary a lot from one day to the next. It gives a measure of the liquidity of the stock in question, that is, how easy or difficult it is to buy or sell a certain stock.