The weighted average market cap is an investment portfolio or stock market index weighted by the market capitalization of each stock in the portfolio or index. In such a weighting arrangement, larger companies account for a greater portion of the investment portfolio or index. Most indexes are constructed in this manner, with the best example being the S&P 500 index.

The weighted median market cap is the midpoint market capitalization of the stocks in an investment portfolio or index. Half of the stocks in the portfolio will have higher market capitalizations, half will have lower. The weighted median market cap helps to remove distortions that can be caused by using averages.

The price-to-sales ratio is used for valuing a stock relative to its own past performance, other companies or the market itself. Sales are less subject to accounting manipulation than earnings, so the price-to-sales ratio has this benefit over the better known price-to-earnings ratio. A low price-to-sales ratio (for example, below 1.0) is usually thought to be a better investment since the investor is paying less for each unit of sales.

Price-to-Sales Ratio = Current Market Price Per Share divided by Revenue (i.e. Sales) Per Share for the Trailing 12 months.

Enterprise value-to-sales (EV/sales) is a valuation measure that compares the enterprise value of a company to the company's sales. EV/sales gives investors an idea of how much it costs to buy the company's sales (i.e. what are the ongoing operations worth). This measure is an expansion of the price-to-sales valuation, which uses market capitalization instead of enterprise value. EV/sales is seen as more accurate because market capitalization does not take into account the amount of debt a company has, which needs to be paid back at some point. Generally, the lower the EV/sales, the more attractive or undervalued the company is believed to be.

Enterprise Value-to-Sales Ratio = Market Cap + Debt + Preferred Shares – Cash & Cash Equivalents divided by Annual Sales.

The price-to-earnings ratio (P/E) is a valuation ratio that compares a company's current share price to its per-share earnings. The earnings that are used are from the previous four quarters. In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio does not tell us the whole story by itself. It is usually more useful to compare the P/E ratios of one company to that of another company in the same industry, to the market in general, or against the company's own historical P/E.

The P/E is sometimes referred to as the "multiple", because it shows how much investors are willing to pay per dollar of earnings. If a company were currently trading at a multiple (P/E) of 20, the interpretation is that an investor is willing to pay $20 for $1 of current earnings.

Investors should avoid basing an investment decision on this measure alone, because the denominator (earnings) is based on an accounting measure of earnings that is susceptible to forms of manipulation, making the quality of the P/E only as good as the quality of the underlying earnings number.

Price-to-Earnings Ratio = Current Market Price Per Share divided by Annual Earnings.

The forward price-to-earnings (P/E) ratio is a measure using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, a forward P/E may help you evaluate the current price of a stock in relation to what you can reasonably expect to happen in the near future. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.

Forward Price-to-Earnings Ratio = Current Market Price Per Share divided by Expected Earnings.

Price-to-tangible book value is a valuation ratio that expresses the price of a security compared to its hard, or tangible, book value as reported in the company's balance sheet. The tangible book value number is equal to the company's total book value less the value of any intangible assets. Intangible assets can be such items as patents, intellectual property, goodwill, etc.

In theory, a stock's tangible book value per share represents the amount of money an investor would receive for each share if a company were to cease operations and liquidate all of its assets at the value recorded on the company's accounting books.

Price-to-Tangible Book Value = Share Price divided by Tangible Book Value Per Share.

Price-to-cash flow is a measure of the market's expectations of a firm's future financial health. Because this measure deals with cash flow, the effects of depreciation and other non-cash factors are removed. Similar to the price-earnings ratio, this measure provides an indication of relative value.

Price-to-Cash Flow = Cash Flow divided by Share Price.

Price-to-free cash flow is a valuation metric that compares a company's market price to its level of annual free cash flow. This is similar to the valuation measure of price-to-cash flow but uses the stricter measure of free cash flow, which reduces operating cash flow by capital expenditures. This is done as companies need to maintain or expand their asset bases (capital expenditure) to either continue growing or maintain the current levels of free cash flow.

In general, the higher this measure, the more expensive the company is considered. But it is also useful to compare to the company's past levels of price-to-free-cash flow along with comparing the average within its industry.

Note: Free cash flow is the money that is left after all expenses, which include taxes, interest, and capital expenditures. Therefore, this is money that is not needed to run the business. This is extra money that can be paid out in the form of a dividend, be used to buy back stock, or be reinvested into the company.

Price-to-Free Cash Flow = Market Capitalization divided by Free Cash Flow.

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. If there are no capital gains or losses, the dividend yield is the return on investment for a stock.

Dividend Yield = Annual Dividends Per Share divided by Average Price Per Share.

Long-term debt-to-capital shows the financial leverage of a firm. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure.

Long-Term Debt-to-Capital = Long-Term Debt divided by Long-Term Debt + Preferred Stock + Common Stock.

Total debt-to-capital is a measurement of a company's financial leverage. Debt includes all short-term and long-term obligations. Total capital includes the company's debt and shareholders' equity, which includes common stock, preferred stock, minority interest and net debt.

Companies can finance their operations through either debt or equity. The debt-to-capital ratio gives users an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. This tells investors whether a company is more prone to using debt financing or equity financing. A company with a high debt-to-capital ratio compared to a general or industry average may show weak financial strength, because the cost of its debt may weigh on the company and increase its default risk.

Debt-to-capital = Total Debt divided by Shareholders' Equity + Debt.

Estimated 3-5 year earnings growth is the 3- to 5-year forecasted earnings made by a consensus of the analysts following the public companies in the strategy, composite, or index. Forward earnings differ from trailing earnings (which is the figure that is quoted more often) in that they are a projection and not a fact. There are many methods used to calculate forward earnings and no single established way.

The size of each company and the number of analysts covering each company will dictate the size of the pool from which these estimates are derived. Century Management's analysts are not part of this consensus of analysts used to calculate the estimated 3-5 year earnings growth.

The return on equity is the amount of net income returned as a percentage of shareholders' equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Return on equity is useful for comparing the profitability of a company to that of other firms in the same industry. Return-on-equity (ROE) is expressed as a percentage.

Return on Equity = Net Income divided by Shareholders' Equity.

Net profit margin is a ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.

Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. Profit margin is displayed as a percentage; a 20% profit margin, for example, means the company has a net income of $0.20 for each dollar of sales.