What's the difference?

What's the difference?

Our guide to the differences between commonly confused financial metrics.

Yield vs Dividend yield

Yield to Maturity vs Current Yield

Working capital vs Net working capital

Working Capital vs Free Cash Flow

Working Capital vs Cash Flow

Working Capital vs Cash

Weighted Average Cost of Capital vs return on invested capital

Weighted Average Cost of Capital vs Cost of Equity

Weighted Average Cost of Capital vs Capital Asset Pricing Model

Warrants vs Convertible Debt

Variance vs Covariance

Treynor Ratio vs Jensen's Alpha

Treasury Stock vs Authorized Shares

Term Loan vs Revolving Credit Facility

Tariffs vs Quotas

Standard Deviation vs Standard Error

Short-Term Investments vs Long-Term Investments

Short-Term Debt vs Long-Term Debt

Sharpe Ratio vs Sortino Ratio

Shareholders' equity vs Liabilities

Senior Debt vs Subordinated Debt

Secured Debt vs Unsecured Debt

Sales vs Purchases

Sales vs Marketing

Sales vs Bookings

Revenue per Share vs Earnings per Share

Return on investment vs Return on equity

return on invested capital vs return on capital employed

Return on Equity vs Return on Investment

return on assets vs return on equity

Restricted Stock vs Performance Shares

Principal vs Interest

Principal Protected Notes vs Enhanced Equity Indexed Notes

Price to Earnings vs Price to Sales

Price to Book vs Price to Cash Flow

Pre-tax income vs Taxable income

Passive Management vs Active Management

overheads vs indirect costs

Outstanding Shares vs Float

Operating Income vs Operating Expenses

Operating Income vs Operating Expense

Operating income vs Net income

Operating Income vs Net Income

Open-End Funds vs Variable Annuities

Net Margin vs Operating Margin

Net Income vs Operating Income

Net income vs Net profit

Net Income vs Net Profit

Net Income vs Gross Income

Net income vs Gross income

Net Income vs Earnings Before Taxes

Mutual Funds vs Unit Investment Trusts

Maturity Date vs Coupon Date

Market value of equity vs Book value of equity

market value of debt vs book value of debt

Market Capitalization vs Enterprise Value

Market Cap vs Enterprise Value

Margin vs Markup

long-term assets vs long-term liabilities

Inventory vs Cost of Goods Sold

Interest Rate Swap vs Credit Default Swap

Interest Income vs Interest Expense

Interest Income vs Dividend Income

Interest Expense vs Interest Income

Interest Coverage Ratio vs Times Interest Earned

Information Ratio vs Tracking Error

Inflation vs deflation

Inflation Rate vs Unemployment Rate

Index Funds vs Actively Managed Funds

Growth rate vs Compound annual growth rate

Gross Profit vs Net Profit

Gross margin vs Operating margin

Gross Margin vs Operating Margin

Gross margin vs Net margin

Gross Margin vs Net Margin

Gross Domestic Product vs Gross National Product

Free Cash Flow vs Operating Cash Flow

Free Cash Flow vs Cash Flow from Financing

Foreign Exchange Swap vs Total Return Swap

Foreign Direct Investment vs Portfolio Investment

First Lien Debt vs Second Lien Debt

Expenses vs Losses

Exchange Traded Funds vs Closed-End Funds

Equity vs Liabilities

EPS vs PE

Enterprise Value vs Market Capitalization

Employee Stock Options vs Stock Appreciation Rights

Effective tax rate vs Marginal tax rate

EBITDA vs Operating Income

EBITDA vs Net Income

EBITDA vs EBIT

EBITDA vs Adjusted EBITDA

EBIT vs Operating Income

EBIT vs EBITDA

Earnings Per Share vs Price-Earnings Ratio

Earnings before interest and taxes vs Operating income

Earnings before Interest and Taxes vs Earnings before Interest, Taxes, Depreciation, and Amortization

Dividends vs Interest

Dividends vs Earnings

Dividends vs Capital Gains