Free financial dictionary

Finance, explained like a friend would.

236 financial terms in plain English. Each with an analogy, a real example, and the red flags nobody mentions.

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Dictionary Trading & markets

P/E Ratio

The quick answer

Compares a stock's price to its yearly profit per share: roughly how many years of current earnings it would take the company to pay back its own price tag.

4 min read Medium

The Analogy

A friend's lemonade stand makes $1,000 a year and he'll sell it to you for $10,000. You're paying 10 times its profit: a P/E of 10.

Red Flags & Pitfalls

The debt illusion. P/E ignores debt. A “bargain” at 5 can be sitting on billions in loans.

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Plain English

Every financial term rewritten until it's understood on the first read.

Analogy + real example

Because a formula is not an explanation.

Red flags

Where a term is used to mislead, we say so.

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Elsewhere

A temporary recovery in the price of a declining security, characterised by a short-lived upward retracement within a prevailing bearish trend, typically attributable to short covering and speculative accumulation.

Semino

A brief, temporary rise in a falling stock's price before it drops even lower.

Then an analogy, a real example, and the red flags. Read the entry →

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