Online Financial Ratios Analysis Lessons
Financial ratios
highlight the strength and weakness of a company and
help you to evaluate a business for making better
investment decisions.
Financial
ratios can be further divided into six main categories
namely accounting based financial ratios, management
efficiency ratios, profitability ratios, risk and debt
ratios, liquidity ratios and operation efficiency ratio,
the rest are group under other ratios session. There
listed all the financial ratios sample for your
reference.
Accounting
based financial ratios such as net tangible asset
backing (NTAB) or Book Value (BV), Price to book value
(P/BV) and prince per earning ratio (PE) tell you how
much the business it worth (NTAB) and the the premium
(P/BV) you have to pay for it compare to the book value.
PE ratio tell you how much you have to pay for the stock
price compare to the current profitability of the
company.
Bankruptcy
index or Z score, gearing or leveraging and debt ratios
such as debt to asset ratio, interest coverage ratio and
long term debt to shareholder's equity ratio are all
group under Risk and debt or leveraging ratio.
Cash
ratio, quick ratio, current ratio and inventory to net
working capital are categorized under liquidity ratio.
Liquidity ratio measure how good a company to pay off it
short term obligations from cash or current assets.
Management
efficiency ratios such as return on investment (ROI) and
return on equity (ROE) provide information about how
good the company business return express in net income
compare the invested assets (ROE) or invested
shareholder's equity.
Online Financial Ratios
Analysis Lessons