Compressed, sector-specific KPI definitions — the part of the "rusty jargon" gap that generic CFA-level knowledge doesn't cover. One section per sector, added as each sector's lessons are built. Each entry: what it measures, why it's the metric this industry actually watches, and what a reasonable range looks like.
Added from Lesson 0001 — Big Six Canadian Banks.
Net interest income divided by average earning assets. It's the bank equivalent of a gross margin: the spread the bank earns between what it pays for deposits/funding and what it earns on loans and securities. A rising NIM in a given rate environment usually signals asset-repricing outpacing funding-cost increases, or a favorable shift in loan mix toward higher-yielding categories.
Non-interest expense divided by revenue. Lower is better — it's how many cents of expense it takes to generate a dollar of revenue. The Big Six generally run in the low-to-mid 50s (%). Definitions vary slightly bank to bank (e.g. whether insurance service expenses are netted out), so a 2-3 point gap between banks may be definitional rather than a real efficiency gap.
Common equity capital divided by risk-weighted assets — the core regulatory capital-adequacy measure banking regulators (OSFI in Canada, the Fed/OCC in the US) watch most closely. Higher means more buffer against losses, but also more capital sitting idle rather than being deployed for growth or returned to shareholders. Canadian regulatory minimums plus bank-specific buffers typically put the Big Six in the 13-14.5% range; a bank sitting meaningfully below peers may be capital-constrained (limits buybacks/dividend growth/M&A) while one sitting well above may be building capacity for a specific move.
Net income divided by average common equity (or tangible common equity, for ROTCE, which strips out goodwill/intangibles from an acquisitive bank's balance sheet). This is the headline profitability metric — the general finance concept isn't new to you, but note that Canadian banks report both "reported" and "adjusted" ROE, and the gap between them (removing one-time acquisition/restructuring charges) can be a full percentage point or more in a quarter with active M&A integration.
Provisions for credit losses divided by average loans, usually expressed in basis points. It's the forward-looking credit-quality signal: a rising PCL ratio ahead of an economic downturn (or a bank leaning more aggressively into unsecured/consumer lending) is the earliest tell that credit quality is deteriorating, well before charge-offs actually show up.
Added from Lesson 0002 — Life & Property Insurance. Life and P&C insurers are watched on genuinely different metrics — don't reach for a P&C KPI on a life insurer or vice versa.
(Incurred losses + expenses) divided by earned premium. It's the core P&C underwriting-profitability metric — below 100% means the insurer made an underwriting profit before investment income; above 100% means underwriting itself lost money (still potentially offset by investment returns on the float). Canadian P&C insurers generally target the low-to-mid 90s (%).
OSFI's core capital-adequacy measure for Canadian life insurers — the life-insurance analogue to a bank's CET1 ratio. Measured against a supervisory target (typically around 100%); most large Canadian life insurers run well above it (130–150%+) for buffer and capital-deployment flexibility.
An IFRS 17 concept: the unearned profit on a life insurer's in-force contracts, released into income gradually over the contract's coverage period. Growth in the CSM balance (via new business) is a forward-looking signal of future profitability already locked in, distinct from the current quarter's reported earnings.
APE is a standardized measure of new sales volume (roughly: annualized recurring premium plus a fraction of single premiums) that lets different product types be compared on one scale. New Business Value applies actuarial assumptions to that new business to estimate its value to the company — together, the volume-and-value pair for how fast and how profitably a life insurer is growing its book.
Added from Lesson 0003 — Asset Managers & Holding Companies. This group splits into two genuinely different business types that get judged on different metrics — a fee-based manager (paid to run other people's capital) versus a holding company (owns stakes in businesses/subsidiaries outright). Reaching for a P/E ratio on a holding company is the single most common mistake here — see the caveat under Price-to-NAV below.
Management fees and other recurring fee revenue, minus the direct operating expense of running the asset-management business. The cleanest read on the durable, recurring economics of a fee-based manager — deliberately excludes carried interest (performance fees), which is lumpy and market-dependent. A manager with growing FRE is growing its recurring fee engine regardless of what any single fund's investment performance did this quarter.
FRE plus realized carried interest and realized investment income, minus interest expense and taxes — roughly, the cash the manager could actually distribute to shareholders this period. The headline profitability metric alternative-asset managers themselves emphasize over GAAP net income, because GAAP net income for this industry gets swamped by unrealized fair-value marks on the manager's own balance-sheet investments (see the Price-to-NAV caveat — the same fair-value-accounting issue shows up on both sides of this industry).
The subset of total assets under management that actually generates fee revenue right now (excludes committed-but-undeployed "dry powder" that isn't yet fee-generating on invested capital, depending on the fund's specific fee terms). Growth in fee-bearing capital is the asset-manager equivalent of a bank's loan growth or an insurer's premium growth — the volume driver behind FRE.
Carried interest is the manager's performance-fee share of a fund's investment gains. Accrued carry is the manager's estimated share of gains on investments still held (mark-to-market, not yet cash) — it shows up in GAAP earnings but isn't distributable yet and can reverse if valuations fall before exit. Realized carry is only booked once an investment is actually sold and the cash is in hand — this is the portion that flows into Distributable Earnings above. A manager can show large GAAP earnings from accrued carry in a strong markup quarter while DE barely moves, because none of it has actually been realized yet.
For a holding company, the estimated current value of everything it owns (publicly traded stakes at market price, private holdings at an estimated fair value) minus its own debt, expressed per share. Different holding companies brand this differently — "adjusted net asset value" (Power Corp), "plan value" (an internal target some holdcos guide to) — but the concept is the same: what the pieces are actually worth today, as distinct from what GAAP net income says the company earned this quarter.
Share price divided by NAV per share. A holding company trading below 1.0x (a "discount to NAV") is priced by the market below the sum of its disclosed parts — sometimes justified (conglomerate complexity, a control structure that limits an outside investor's influence, tax leakage if holdings were ever sold and distributed), sometimes a re-rating opportunity if the discount narrows. A premium (above 1.0x) means the market is paying for something beyond the disclosed NAV — capital-allocation skill, growth optionality in private/unlisted holdings not yet marked up, or in some cases genuine overvaluation.
Some holding companies in this space don't just hold operating businesses directly — they hold a controlling stake in another public company that itself holds the operating businesses (a parent owning a majority of a subsidiary that is itself separately listed and traded). When that's the structure, the two tickers aren't independent comparables: a re-rating in the subsidiary's stock mechanically moves the parent's NAV and, usually, its own share price. Always check whether two names in a "peer" comparison are actually parent and subsidiary before treating their returns as two independent data points.
Added from Lesson 0004 — Integrated Oil Majors. This group splits into pure upstream producers (earn on crude/gas realized prices alone) and integrated companies (upstream plus refining and retail) — the same manager-vs-holdco-style split Module 0003 taught, just for a different reason: here it's whether a downstream buffer exists at all, not how ownership is structured.
Realized revenue per barrel (or BOE) minus royalties and direct operating/transportation costs — the upstream equivalent of a gross margin per unit. A rising netback in a stable price environment usually signals cost discipline or a richer product mix (more high-value synthetic crude/light oil, less discounted heavy barrels); a falling netback with flat prices is a cost or mix problem worth investigating directly rather than assuming it's just "the market."
The price discount of Western Canadian Select (WCS, the Canadian heavy-oil benchmark) versus West Texas Intermediate (WTI, the main US light-crude benchmark) — driven mainly by pipeline/transportation capacity constraints and the heavier, more complex refining WCS requires. A widening differential hurts a heavy-oil-weighted pure upstream seller (lower realized price on barrels sold into the open market), but can actually benefit an integrated company whose own refineries are configured to run heavy crude — the wider discount becomes a cheaper input cost downstream rather than a lost sale price.
Throughput is the volume of crude actually processed (bbl/d); utilization is that volume divided by the refinery's rated capacity. A low utilization quarter is often explained by a planned turnaround (scheduled maintenance that temporarily takes a unit offline) rather than weak demand or an operating problem — always check whether a downstream miss is planned or unplanned before reading it as a performance signal.
Adjusted Funds Flow (also called funds flow from operations) is cash generated from operations before working-capital swings — the energy-sector analogue of "adjusted operating cash flow," and the number these companies themselves emphasize over GAAP net income, since net income can swing on non-cash items like impairments or derivative mark-to-market. Free Funds Flow subtracts sustaining/growth capital spending from FFO, leaving what's actually available for dividends, buybacks and debt paydown — the direct input to a capital-return story.
Proved (or proved-plus-probable) reserves divided by current annual production — a rough "years of remaining production at the current rate" figure. Unlike most other KPIs in this glossary, RLI is typically an annual disclosure (tied to a year-end reserves report), not something restated every quarter — don't expect to find a fresh RLI figure in every quarterly release the way you would a production or cash-flow number.
Added from Lesson 0005 — Pipelines & Midstream. Pipeline companies mostly earn a toll, so the metrics are about the quality and durability of that toll, the balance sheet that funds growth, and the growth backlog — not production or netbacks as in the integrated-oil group above. The physical and contractual vocabulary (take-or-pay, apportionment, frac spreads, LNG) is in the Oil & Gas Fundamentals glossary.
Earnings before interest, taxes, depreciation and amortization, adjusted by each company for items it deems non-operating. For capital-intensive pipelines this, not net income, is the headline measure — D&A is large and fair-value or impairment items swing GAAP earnings. It is also the denominator of the leverage ratio and of EV/EBITDA, the sector's standard valuation multiple. Companies label it differently (Enbridge: adjusted EBITDA; TC Energy: comparable EBITDA; Pembina: adjusted EBITDA, which adds in a proportionate share of its joint ventures).
The per-share cash-flow measure each company pays its dividend out of. Enbridge's DCF is operating cash flow before working-capital changes, less distributions to non-controlling interests, preferred dividends and maintenance capex, adjusted for unusual items — it is a post-maintenance-capex figure. TC Energy's comparable funds generated from operations (FFO) and Pembina's adjusted cash flow from operating activities are on different bases. A payout ratio is only comparable to the same company's own history or stated target (Enbridge's long-standing target is 60–70% of DCF), not across names.
Debt divided by EBITDA: how many years of EBITDA it would take to repay debt. Pipelines run higher than most sectors because their cash flows are contracted — Enbridge targets 4.5–5.0x and TC Energy about 4.75x; Pembina reports its own proportionately consolidated version. Check whether a quoted ratio is rolling or year-end, adjusted or reported, and proportionately consolidated or not; and whether the company recently issued equity or sold an asset, since either is a lever used to get back to target.
The share of EBITDA that comes from rate-regulated assets, long-term take-or-pay contracts, short-term or interruptible services, and commodity-linked margins (such as frac spreads). It is the single most useful indicator of how bond-like a pipeline's earnings are — TC Energy states 98% of comparable EBITDA is regulated or take-or-pay; Pembina's Marketing & New Ventures division (~10% of Q2 2026 divisional EBITDA) is the commodity-linked slice. Not every company discloses it as one number.
The company's sanctioned or committed growth projects, with the capital to be spent and (usually) the expected in-service dates — the pipeline-sector equivalent of an order book. A larger backlog means more visible EBITDA growth but also more execution, financing and cost-overrun risk (Coastal GasLink's cost more than doubling is the cautionary case). Look for how much is expected in service within 12–24 months, and which projects are sanctioned versus merely announced.
Throughput is the volume moved; utilization is throughput as a share of capacity (a system at full utilization is apportioned); for a power asset such as a nuclear unit, availability is the share of time it was able to generate. For a toll-based business, high utilization signals pricing power and the case for expansion, while volume itself matters less than contracted capacity.
Backlog is orders received but not yet delivered and recognized as revenue; book-to-bill is orders in the period divided by revenue in the period. Above 1.0 means the order book is growing. For large-transformer and turbine makers, a backlog can run several years of revenue, so it is the best forward indicator — but it is lumpy (a few HVDC or turbine awards can swing a quarter) and says nothing by itself about the margin of the orders inside it. Always ask how much of the backlog was priced before recent cost inflation.
A customer payment to secure a future production slot at a factory (used heavily for gas turbines) before a firm equipment order exists. It converts a capacity bottleneck into a financing event: it shows demand and locks in cash, but it is softer than a firm order, so read slot reservations separately from booked backlog.
Large power transformers and generator step-up (GSU) transformers are custom-engineered, built to order, take years to deliver and are the scarce items. Distribution transformers (pole-mount, pad-mount, indoor dry-type) are higher-volume catalogue products with shorter lead times. When a company says "transformers," ask which kind — the economics, the shortage and the competitor set differ by rung of the voltage ladder.
The specialty steel used in transformer cores. Supply is concentrated (Wood Mackenzie, Aug 2025: a single US domestic supplier), which makes it a bottleneck input and a trade-policy exposure alongside copper.
Materials/mining (all-in sustaining cost), REITs (FFO/AFFO, cap rate), retail (same-store sales), telecom (ARPU, churn) — added incrementally, not pre-written, so each definition is grounded in the lesson that actually taught it.