Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...

The quick ratio, often referred to as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. It's calculated as (cash + ...

Financial ratios provide business owners with a quantitative analysis of their company's financial information. Business owners can also use financial ratios to create benchmarks for comparative ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Financial ratios allow you to break down your company's financial statements and see how it is performing from different angles. Whether you are creating a proposal for new investors, seeking bank ...

Ratio analysis assesses company performance using financial ratios. ITW improved profit margins and FCF through strategic alignment. ITW's stock outperformed S&P 500 over a decade, showing strategic ...

Liquidity ratios assess if a company can cover short-term debts with available assets. Key ratios include cash, quick, current, and operating cash flow ratios. A liquidity ratio over 1 suggests a ...

The Equity to Asset Ratio (EAR) is a financial metric that measures the proportion of a company’s assets that are financed by its shareholders’ equity. This ratio gives investors and analysts an ...

The current ratio is a widely understood financial metric, familiar even to those with a basic knowledge of banking and finance. It is routinely used by bankers during the credit appraisal process for ...