Key figures are among the most important tools for anyone seriously involved in investing – whether you are just starting out or have already gained experience. They provide you with a deeper insight into the economic strength of a company, help in comparing with other market participants, and give indications of efficiency, profitability, and stability.
Key figures such as Return on Equity (ROE), Return on Capital Employed (ROCE), or Return on Assets (ROA) are not buzzwords – they are established metrics in fundamental stock analysis. Those who use them correctly can assess the quality of a company much better and protect themselves from costly misjudgments. Especially when investing in individual stocks or trading options on quality companies, it is worthwhile to look at the numbers behind the company.
But beware: A single key figure never tells the whole truth. Only in combination with other figures – and the right context – do they reveal their significance. Industry differences, business models, or even accounting tricks can make a number look better or worse than it actually is. That’s why it’s important not only to know the formula but also to understand when and how a key figure is meaningfully applied.
In our blog posts, we show you how to properly classify central financial key figures – explained in an understandable way and with concrete examples. You will learn not only what, for example, the ROIC measures but also why it is more meaningful in certain situations than the ROE – and what that means for your investment decision.
Whether you are a long-term buy-and-hold investor, specifically looking for undervalued companies, or want to generate additional income with options: A solid basic understanding of business key figures gives you a real advantage in the stock market. On this page, you will find all our posts related to company key figures – gradually supplemented, expanded, and with a clear goal: to help you make better investment decisions.
