See also:
Quick Ratio Analysis
Price to Book Value Analysis
Price Earnings Growth Ratio Analysis
Time Interest Earned Ratio Analysis
Financial Ratios are used to measure financial performance against standards. Analysts compare financial ratios to industry averages (benchmarking), industry standards or rules of thumbs and against internal trends (trends analysis). The most useful comparison when performing financial ratio analysis is trend analysis. Financial ratios are derived from the three financial statements; Balance Sheet, Income Statement and Statement of Cash Flows.
Financial ratios are used in Flash Reports to measure and improve the financial performance of a company on a weekly basis.
The following five (5) major financial ratio categories are included in this list.
Liquidity ratios measure whether there will be enough cash to pay vendors and creditors of the company. Some examples of liquidity ratios include the following:
Activity ratios measure how long it will take the company to turn assets into cash. Some examples of activity ratios include the following:
Debt ratios measure the ability of the company to pay its’ long term debt. Some examples of debt ratios include the following:
The profitability ratios measure the profitability and efficiency in how the company deploys assets to generate a profit. Some examples of profitability ratios include the following:
The market ratios measure the comparative value of the company in the marketplace. Some examples of market ratios include the following:
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