Concept explainers
79 concepts, plain English
Every concept invest-like uses in its scoring, defined with the formula, a worked example, and a sentence on when it matters. Organized into platform features, the seven framework fit-scores, valuation and quality ratios, and behavioral or market structure concepts.
Platform concepts (invest-like specifics)
What the platform actually does. Read these first if you want to understand the AI features, scoring engine, and screens.
Buffett-Fit Score
The 5-pillar deterministic verdict invest-like grades every public stock on.
Cross-framework consensus
The 5-of-7 / 6-of-7 / 7-of-7 cohort signal across seven legendary investors.
The Boardroom debate
How four named investors argue any stock with a moderator skeptic.
Ask Buffett (RAG)
Retrieval-grounded chat over every Berkshire annual letter 1977 to 2024.
AAOIFI Standard 21
The four canonical halal-screening tests applied across the US universe.
Per-investor framework explainers
One explainer per framework: what it scores, what passes, what fails. Use these as the canonical reference for any of the seven philosophies.
Graham-Fit Score
Defensive deep-value scoring. Earnings stability, debt limits, book-value margin of safety.
Fisher-Fit Score
Growth-quality with scuttlebutt. Sales growth durability, R&D efficiency, management depth.
Lynch-Fit Score
Growth at a reasonable price (GARP). PEG, earnings consistency, story comprehension.
Greenblatt-Fit Score
Magic Formula. High return on invested capital plus low EV/EBIT.
Munger-Fit Score
Wonderful businesses, willing to pay up. Quality-weighted moat with margin tolerance.
Smith-Fit Score
Modern compounder (Fundsmith). High ROCE, organic growth, low capital intensity.
Valuation, quality, and balance-sheet ratios
Every ratio invest-like uses in its scoring, defined with the formula and a worked example. Pair each one with the per-framework explainer above to see where the metric matters most.
PE ratio
Price divided by trailing earnings. The single most-cited valuation number.
PB ratio
Price divided by book value. Graham's foundational defensive screen input.
PEG ratio
PE divided by growth rate. Lynch's growth-at-reasonable-price summary.
Enterprise value (EV)
Market cap plus net debt. The capital-structure-adjusted price tag.
EBITDA
Earnings before interest, tax, depreciation, amortisation. Use with caveats.
Tobin's Q
Market value of assets divided by replacement cost. Whole-market valuation check.
FCF yield
Free cash flow divided by enterprise value. The most honest valuation ratio.
Free cash flow
Operating cash flow minus capex. What the business actually produces.
Owner earnings
Buffett's preferred earnings measure. FCF with the maintenance-capex adjustment.
Intrinsic value
What a business is worth in present-value cash flow terms.
Margin of safety
Graham's cushion concept. Price below intrinsic value by enough to absorb error.
DCF valuation
Discounted cash flow model. The 3-stage variant in 10 lines of math.
Magic Formula
Greenblatt's ROIC + earnings-yield combined rank.
ROIC
Return on invested capital. The single best business-quality input.
ROE
Return on equity. Use only after checking the leverage that drives it.
Gross margin
Revenue minus COGS, divided by revenue. The cleanest pricing-power signal.
Operating margin
Operating income divided by revenue. After-overhead profitability.
DuPont analysis
ROE decomposed into margin, turnover, and leverage. Where returns really come from.
Cash conversion cycle
Days inventory + receivables - payables. Working-capital efficiency in one number.
Asset turnover
Revenue divided by average assets. How hard the balance sheet works.
Debt-to-equity ratio
Total debt divided by equity. The first leverage check on any balance sheet.
Current ratio
Current assets divided by current liabilities. Short-term liquidity.
Altman Z-Score
Five-factor distress predictor. Z < 1.8 = bankruptcy risk.
Piotroski F-Score
Nine-criterion fundamental health score for value-cohort stocks.
Quality investing
The post-Graham evolution. Quality at a fair price compounded.
Economic moat
Network effects, switching costs, intangibles, scale, efficient scale.
CAGR
Compound annual growth rate. How returns actually compound, not arithmetic mean.
Dividend aristocrat
25+ consecutive years of dividend increases on the S&P 500.
Dividend king
50+ consecutive years of dividend increases. A much smaller club.
Payout ratio
Dividends divided by earnings. The sustainability check.
Share buyback
Why companies do them and when they create value vs destroy it.
Dividend yield
Annual dividend per share divided by price. The income half of total return - and why a high yield is often a warning.
ROA (return on assets)
Net income divided by total assets. Capital efficiency, unflattered by leverage.
EV/EBITDA
Enterprise value over EBITDA. The capital-structure-neutral multiple acquirers use.
Price-to-sales (P/S) ratio
Market cap divided by revenue. Values companies with no earnings - but only means something next to margins.
Earnings yield
EPS divided by price - the inverse of P/E. Compares a stock's return directly to bond yields.
Net profit margin
Net income divided by revenue. The share of every sales dollar that becomes bottom-line profit.
Quick ratio (acid-test)
Current assets minus inventory, over current liabilities. The stricter liquidity test.
WACC
Weighted average cost of capital - the hurdle rate ROIC must beat and the DCF discount rate.
Interest coverage ratio
EBIT divided by interest expense. How many times over earnings cover the interest bill.
ROCE
Return on capital employed - EBIT over capital employed. Fundsmith's headline quality metric.
Net debt
Total debt minus cash. The honest leverage number behind enterprise value and net-debt/EBITDA.
EPS (earnings per share)
Net income per share - the base of the P/E. Easy to flatter with buybacks, so cross-check it.
What's a good number? (benchmarks)
The other half of every ratio question: not just what it means, but what counts as good. Concrete ranges for the metrics people ask about most, with the context that decides whether a number is actually strong.
What is a good FCF yield?
5%+ beats the Treasury; 5-8% is the value sweet spot. Ranges, with the caveats.
What is a good ROIC?
It has to beat the cost of capital. 15-20% is strong; 20%+ sustained is elite.
What is a good P/E ratio?
No single number - judge it against growth (PEG) and peers. The ranges explained.
What is a good ROE?
15%+ sustained, but only after you check whether debt is doing the lifting.
What is a good current ratio?
1.5-3.0 is the comfortable zone. Below 1.0 is a flag; above 3.0 can mean idle assets.
What is a good profit margin?
10%+ is strong for most industries - but software clears 25%+ and grocers run 3%. Compare to peers.
What is a good debt-to-equity ratio?
Below ~1.0 for most companies. Pair it with interest coverage - affordability beats the raw level.
What is a good dividend yield?
2-5% is the sweet spot. Above 6% is often a yield trap; a growing 3% beats a fragile 7%.
What is a good gross margin?
40%+ signals pricing power; 70%+ is software. Stability over time is the moat signal.
How to calculate it (step by step)
The calculation-intent companion to the definitions: the formula, where each input lives on the financial statements, and a fully worked numeric example.
How to calculate FCF yield
Free cash flow / market cap. The four steps, with a worked example.
How to calculate intrinsic value
A discounted cash flow (DCF) in five steps, end to end, with the math.
How to calculate margin of safety
(Intrinsic value - price) / intrinsic value. Why Graham wanted it large.
How to calculate ROIC
NOPAT / invested capital, then compared to WACC. Worked end to end.
X vs Y (which metric, when)
The metrics investors most often confuse, set side by side: what each measures, when to trust which, and the trap of using the wrong one.
FCF yield vs P/E ratio
Cash vs accounting earnings. Why FCF yield is harder to game - and how to convert between them.
ROIC vs ROE
Why leverage flatters ROE but not ROIC, and which to anchor on for true quality.
Owner earnings vs free cash flow
The maintenance-vs-total capex difference - and why FCF understates fast growers.
Intrinsic value vs market price
Price is what you pay, value is what you get. The gap is the whole opportunity.
Behavioral, statistical, and market-structure concepts
The traps and the meta-concepts. Survivorship bias eats backtest claims for breakfast; the Shiller CAPE and accruals anomaly are the canonical academic priors.
Survivorship bias
Why most backtests overstate returns, and how to correct for it.
Look-ahead bias
When the backtest sees information it could not have known at the time.
Data-mining bias
Why a strategy that worked in backtest often fails out of sample.
Sloan accrual anomaly
Why high-accrual stocks underperform. A 1996 paper that still works.
Shiller CAPE
Cyclically adjusted PE. A 10-year smoothed valuation ratio for the whole market.
Momentum factor
Why winners keep winning over 3 to 12 months and lose over multi-year horizons.
Low-volatility anomaly
Low-vol stocks beat high-vol on risk-adjusted returns across decades.
Yield curve inversion
When short-term Treasury yields exceed long-term. The classic recession signal.
Related
- Glossary - alphabetical reference of every defined term across the site
- Methodology hub - how invest-like operationalises each concept in its scoring
- Value investing explained - the 5000-word canonical explainer covering all seven frameworks
- Working papers - peer-reviewable methodology PDFs with permanent DOIs
- FAQ - 74 answered questions on the product, pricing, and methodology