Casual Financial Ratios List
The debt ratio indicates how much debt the firm is using to purchase assets.
Financial ratios list. There are generally five types of financial ratio. Financial ratios can be classified into ratios that measure. Financial ratios can give you a clear picture of the raw data of a companys finances so you can best gauge how it will perform which will let you to make prudent investment choices whether youre looking at blue chips or penny stocks.
An activity ratio relates information on a companys ability to manage its resources that is its assets efficiently. For most sectors investors want to see positive current ratio 15. Summary of Financial Ratio Calculations This note contains a summary of the more common financial statement ratios.
By using financial ratios you can compare a lot of different business metrics to more deeply understand just what is going on with the company. A financial leverage ratio provides information on the degree of a companys fixed financing obligations and its ability to satisfy these financing obligations. Uses of Financial Ratios.
The data you can glean from them will give you an. Liquidity ratios are the group of financial ratios that measure an entity financial ability to pay its short term debt. This is a quick financial ratio cheatsheet with short explanations formulas and analyzes of some of the most common.
This list is not exhaustive. Calculations vary in practice. For example an increasing debt-to-asset ratio may indicate that a company is overburdened with debt and may eventually be.
Common financial leverage ratios are the debt to equity ratio and the debt ratio. In simple terms financial ratios are the relationship established between various statistical data provided in the companys financial documents such as the balance sheet income statement cash flow statements etc. A few points should be noted.