Dependent Variable: Overview, vs. Independent, Example

What Is a Dependent Variable?

By Kristi Waterworth – Updated Nov 6, 2025 at 4:00 PM | Fact-checked by Frank Bass

Key Points

Dependent variables change based on other inputs in financial models, affecting investment outcomes.
Independent variables like earnings affect dependent variables, influencing metrics like P/E ratios.
Understanding dependent variables helps investors analyze risk and compare investment growth potential.

There's a lot of math behind picking stocks, and with that, a lot of variables to consider. This is why it's so important to understand what a dependent variable is, what it does in an equation, and why you should pay attention to it. Read on to learn more about this concept.

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Man scratching his head as he looks at a chalkboard full of various equations. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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