multiple

Definition

In finance, it's the magical number you get when dividing a company's stock price by its earnings—the higher the multiple, the more investors believe in fairy tales about future growth. Also known as the P/E ratio, it tells you how many years of current profits you're paying for today. Basically, it's the market's way of saying 'trust me bro' with numbers.

Example Usage

The tech startup was trading at a 50x multiple, which either meant it was the next Amazon or investors had completely lost their minds.

Source: Financial terminology via industry standards

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free cash flow

Cash from operations minus capital expenditures—the actual money left over after keeping the business running that can be used for dividends, buybacks, or acquisitions. It's the ultimate 'show me the money' metric that cuts through accounting games.

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payoff

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Intermediate

Securities

Tradeable financial instruments like stocks and bonds, given a name that implies safety despite being approximately as secure as a sandcastle at high tide. The irony of calling them securities when they can lose 50% of their value overnight is Wall Street's longest-running joke.

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Beginner

current ratio

Current assets divided by current liabilities, measuring whether you can pay short-term bills with short-term assets. A ratio above 1.0 suggests solvency; below suggests you should probably start returning the recruiters' calls.

💰 Finance / Accounting

Intermediate

Volatility

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