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EBITDA Formula: How to Calculate It Step by Step

By Cierra Seay

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's core profit.
The formula adds those four items back to net income to show what the underlying business earns.
Investors use EBITDA to compare companies and to judge how many times earnings a stock is selling for.

What Is a Stock Option? A Plain-English Guide

By Nate Gregory

A stock option is a contract giving you the right, but not the obligation, to buy or sell a stock at a set price by a set date.
There are two types: calls (the right to buy) and puts (the right to sell).
Options are powerful but risky, so they suit investors who already have the basics down.

Put Option: What It Is and How It Works

By Kalbir Talwar

A put option gives you the right to sell a stock at a set price by a set date.
Investors use puts to bet a stock will fall, or as insurance to protect shares they own.
The most you can lose buying a put is the premium you paid, which makes it a defined-risk tool.

Operating Margin: What It Is and How to Calculate It

By Jackson Moreland

Operating margin shows how much profit a company keeps from its core business after paying its running costs.
The formula is operating income divided by revenue, shown as a percent.
A strong, steady operating margin signals a well-run business that controls its costs.

Enterprise Value: What It Is and How to Calculate It

By Cierra Seay

Enterprise value is the full price of buying an entire company, including its debt and minus its cash.
The formula is market cap plus total debt minus cash.
It gives a truer picture of a company's size than market cap alone, which is why it's used in serious valuation.

Free Cash Flow: What It Is and Why It Matters

By Milena Thomas

Free cash flow is the real cash a business has left after paying its operating costs and investing in itself.
It's the money available for dividends, buybacks, paying down debt, or buying other businesses.
It's harder to fake than reported profit, which is why serious investors watch it closely.

What Is Working Capital? A Simple Guide for Investors

By Kalbir Talwar

Working capital is the cash a business has to run day to day: its short-term assets minus its short-term bills.
The formula is current assets minus current liabilities.
It shows whether a company can cover what it owes soon, which is a basic health check before you invest.

Covered Call: How This Income Strategy Actually Works

By Nate Gregory

A covered call lets you earn extra income from shares you already own by selling someone the right to buy them at a higher price.
You collect cash up front, called the premium, no matter what happens next.
The tradeoff is a cap on your upside, so it fits calmer, income-focused investors more than high-growth bets.

Gross Margin: What It Is and How to Calculate It

By Andre Savage

Gross margin shows how much money a company keeps from each sale after paying to make the product.
The formula is simple: revenue minus the cost of goods sold, shown as a percent of revenue.
A high, steady gross margin often signals a strong business with pricing power.

Backdoor Roth IRA: A Simple Guide for High Earners

By Cierra Seay

A backdoor Roth IRA is a way for high earners, who are normally blocked from contributing to a Roth, to still get money into one.
The appeal is the Roth itself: pay taxes now, then grow and withdraw the money tax-free later.
The steps are simple in theory but have tax traps, so it's smart to involve a professional.

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