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The amount of a company’s shareholder’s equity that exceeds the value of its hard assets. 

Surplus cash generated from company’s basic operations without regard to income tax entries such as depreciation and amortization. Changes in levels of inventories, accounts receivable and accounts payable also affect cash flow. Also see Free Cash Flow. 

Support levels are levels where a declining stock will find bottom and bounce up from. Supports are formed when a stock breaks above resistance and holds above that level: the old resistance then becomes support. Support levels are also formed when a stock spends a lot of time at one level and then breaks upward. The level that the stock spent most of the time at will most likely act as support. Key moving averages, such as the 18, 50, and 200, also act as support. We like to buy stocks as they bounce upward off of support levels and are backed by good money flow and buying.

An order placed which is not at the current market price. It becomes a market order once the security touches the specified price. Buy stop orders are placed above the present market price. Sell stop orders are placed below the present market price (also known as a stop loss). If a stock gaps past the stop order, it becomes a market order and is filled at the next trading price.

Gross profit divided by sales. 

Not the same as operating income. See pro forma earnings. 

The shares or stock sold by a company to provide start-up capital before carrying out an initial public offering (IPO).

Difference between reported earnings and analysts’ consensus forecasts. It’s a positive surprise if reported earnings exceed forecasts, and a negative surprise when reported earnings come in below forecasts.

Order with broker to sell stock at market price when it goes down to specified (limit) price.

Profit a company makes on goods and services before considering overhead expenses. Gross profit is sales minus cost of sales.