Book to bill – the ratio of orders received in a given year divided by revenue earned in the same year.
‘Defensive’ stocks/sectors – companies/sectors that tend to be more resilient during economic downturns. This could for example include consumer staples such as groceries, health care or utilities companies.
Disinflationary – something that causes a scenario where inflation continues to be present but the rate of inflation is falling. For example, disinflation would see inflation drop from 5% to 3%.
EBITDA (earnings before interest, taxes, depreciation, and amortization) – a company profit measure. It differs from operating profit in that depreciation and amortization have not yet been subtracted.
Headwinds/tailwinds – headwinds are factors likely to negatively affect a company, tailwinds on the other hand are likely to have a positive impact.
Net debt – A measure of a company’s liquidity
and financial health. To calculate net debt, the total debts of a firm are subtracted from its cash and cash equivalents. Used in conjunction with other measures (such as EBITDA above to show net debt/EBITDA).
Operating margins – operating profit is a company’s earnings before interest and tax, calculated by subtracting operating costs from revenue. Operating margin is calculated by dividing operating profit
by revenue.
Operational deleverage – typically happens when volume of units sold falls, this results in a company’s unchanged fixed costs having to be spread across
a fewer number of units sold, usually resulting in
lower profitability.
Reflationary – relates to an increase in the money supply or an increase in economic activity. The objective is to increase demand for goods and services.
