Investment Glossary

An estimate of what a stock is truly worth based on the company's financial performance — revenue, cash flow, and growth — discounted to today's value. It is not the market price, which is driven by supply and demand.

The primary valuation method used by this platform. It projects future cash flows over 20 years and discounts them back to today using a discount rate. The sum of those discounted cash flows is the intrinsic value. No perpetuity terminal growth rate is used — the business must justify its price through what it produces over 20 years.

Total Liabilities minus Cash and Cash Equivalents from the latest quarterly Tadawul disclosure. Subtracted from the raw DCF value to arrive at equity value per share. A company with SAR 500 billion in projected cash flows may still have a modest intrinsic value per share if it carries significant liabilities. Shown explicitly as a step in the IV calculation.

For 9 government-backed companies (SOEs), a conservative sector Exit Multiple based on global median EV/EBITDA benchmarks is added at year 20 of the DCF projection. This reflects their longer operational horizon beyond the 20-year window. The base DCF without the multiple is always shown separately as a conservative reference.

The minimum return a company must earn to satisfy all its capital providers. Used as the discount rate in DCF calculations. TASIV calculates it as: Risk-Free Rate + Beta × Market Risk Premium + Sector Spread. A higher WACC produces a more conservative (lower) intrinsic value.

Used for banks and financial companies. Compares the market price to the book value per share. A P/B of 1.0 means the stock trades at exactly its book value. Used when cash flow models are less reliable for financial sector companies.

Used for high-growth companies where earnings are low or negative but revenue is growing strongly. It relates the price-to-sales ratio to the revenue growth rate. When the PSG model produces an IV below 10% of market price, the platform shows N/A — the market is pricing future hypergrowth not yet captured in available financial history.

Shown on every intrinsic value output. High: 3+ years of consistent Revenue, Net Income, and CFO — all pass consistency checks. Medium: some series are inconsistent or volatile — directionally useful but treat the exact number with caution. Low: critical data quality issues — high debt, inconsistent cash flows, or only 1–2 years of data.

The rate used to convert future cash flows into today's value. A higher discount rate produces a more conservative (lower) intrinsic value. This platform sets the discount rate automatically based on the company's sector and beta.

Cash generated from running the core business — collecting from customers, paying suppliers and employees. It is harder to manipulate than net income and is the primary input for DCF-CFO calculations. IFRS 16 lease accounting can inflate CFO for companies with large lease portfolios — the platform detects and flags this automatically.

An international accounting standard that requires companies to record lease obligations on their balance sheet. For companies with large lease portfolios (telecoms, fuel stations, retail chains), IFRS 16 can significantly inflate Operating Cash Flow relative to Net Income. TASIV detects this automatically using the CFO/NI ratio and applies a quality discount to prevent the inflation from inflating the DCF output.

Operating cash flow minus capital expenditure. FCF is what remains after the business has invested in itself — available for dividends, debt repayment, or acquisitions.

Net income divided by shareholders' equity. Measures how efficiently a company uses shareholder capital to generate profit. Above 15% is considered strong. Warren Buffett considers consistent high ROE a sign of a durable business.

Net income divided by the number of shares outstanding. Tells you how much profit the company earned for each share you own. Growing EPS over time is a positive signal.

Total debt divided by earnings before interest, taxes, depreciation, and amortization. Measures how many years of operating earnings are needed to repay all debt. Below 2× is comfortable; above 4× is high risk.

A structural advantage that protects a company's profits from competitors. Wide moat means the advantage is durable for many years. TASIV scores moat across 4 equal-weight pillars: Profitability, Predictability, Financial Strength, and Growth Resilience. Wide ≥ 60, Moderate 35–59, Narrow < 35.

The difference between intrinsic value and market price, expressed as a percentage. If IV is SAR 100 and the price is SAR 70, the margin of safety is 30%. A larger margin provides more protection if your valuation assumptions turn out to be wrong.

Annual dividend paid per share divided by the current market price. A 4% yield means for every SAR 100 invested, you receive SAR 4 in dividends annually. A very high yield may signal the market expects the dividend to be cut.

Percentage of net income paid as dividends. Below 60% is generally healthy. Above 80% may be unsustainable if earnings decline. Above 100% means the company is paying more than it earns.

Measures how much a stock moves relative to the overall market. Beta of 1.0 = moves with the market. Above 1.0 = more volatile. Below 1.0 = more stable. Used in WACC calculation.

The steady annual growth rate that would take a value from its starting point to its ending point over a given number of years. Used to measure how fast revenue or earnings have grown. CAGR of 10% means the metric doubled approximately every 7 years.