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Easy (7)
EasyHow to calculate return on investment (ROI)How much did you gain or lose compared with what you paid?
ROI % = (final value + dividends − cost) ÷ cost × 100EasyPercentage change in priceWhat "the share rose 15%" actually means.Change % = (new price − old price) ÷ old price × 100EasySimple vs compound returnsWhy money grows faster when you reinvest the returns.Simple = amount × (1 + rate × years)EasyDividend yieldHow much cash a share pays you each year relative to its price.Dividend yield % = annual dividend per share ÷ share price × 100EasyThe rule of 72A mental shortcut: when will your money double?Years to double ≈ 72 ÷ yearly return %EasyReal return after inflationIs your money really growing, or just the number?Roughly: real return ≈ return − inflationEasyYour savings rateThe most important number early in your financial journey.Savings rate % = amount saved each month ÷ monthly income × 100Medium (7)
MediumAnnualised return (CAGR)How to compare investments held for different lengths of time.
CAGR = (final value ÷ starting value)1 ÷ years − 1MediumThe price-to-earnings ratio (P/E)How much you pay for each rial of a company's profit.P/E = share price ÷ earnings per shareMediumEarnings per share (EPS)Each share's slice of the company's net profit.EPS = net profit ÷ number of sharesMediumWeighted portfolio returnYour whole portfolio's return, not each piece on its own.Portfolio return = sum of (each asset's weight × its return)MediumHow much you need to recover a lossWhy big losses are harder to recover than they look.Gain needed = loss ÷ (1 − loss)MediumDebt payments as a share of incomeThe number banks check before any financing.Payment ratio % = total monthly repayments ÷ monthly income × 100MediumTotal return including dividendsPrice is only half the story.Total return % = (current price − purchase price + dividends) ÷ purchase price × 100Advanced (6)
AdvancedThe monthly payment formulaHow a bank works out your payment on a reducing balance.
Payment = P × r ÷ (1 − (1 + r)−n)AdvancedFuture value of monthly investingThe formula behind the compound growth calculator.FV = initial × (1 + r)n + monthly × ((1 + r)n − 1) ÷ rAdvancedBook value and price-to-book (P/B)Comparing the price with what the company actually owns.Book value per share = shareholders' equity ÷ number of sharesAdvancedDebt-to-equity ratioHow much a company relies on borrowing.Debt-to-equity = total debt ÷ shareholders' equityAdvancedVolatility (standard deviation)How to measure how much an investment swings.Volatility = √(average of (return − mean return)2)AdvancedTwo ways to calculate zakat on sharesIt depends on your intent: trading or long-term holding.Trading: zakat = market value × 2.5%All content on this site is for educational purposes only and is not investment advice or a recommendation. Past performance does not guarantee future results. Consult a licensed adviser before making any investment decision.