DEFINITION of 'Key Ratio'
A mathematical ratio that illustrates and summarizes the current financial condition of a company. Key ratios can be used to easily obtain an idea of a company's financial status. Companies that are in good condition financially will have superior ratios to those that are performing poorly.
Next Up
BREAKING DOWN 'Key Ratio'
There are actually several different key ratios used by analysts to examine a bank's financial condition. These include the capital to assets ratio, the loan loss reserves to total loans ratio, the liquidity ratio and many others. These ratios provide direct measures of different specific aspects of a bank's assets, liabilities and cash flow.
RELATED TERMS

Current Ratio
The current ratio is a liquidity ratio measuring a company's ... 
Tier 1 Capital
A term used to describe the capital adequacy of a bank. Tier ... 
Liquidity Ratios
A class of financial metrics that is used to determine a company's ... 
Capital Adequacy Ratio  CAR
A measure of a bank's capital. It is expressed as a percentage ... 
ShortTerm Debt
An account shown in the current liabilities portion of a company's ... 
Audit
An unbiased examination and evaluation of the financial statements ...
Related Articles

Fundamental Analysis
Ratio Analysis Tutorial
If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios. 
Markets
How To Use PriceToSales Ratios To Value Stocks
Take a look at how this effective ratio can be influenced by certain critical factors. 
Forex Education
How To Use The P/E Ratio And PEG To Tell A Stock's Future
While the pricetoearnings ratio is commonly used for assessing stock prices, the price/earningstogrowth ratio offers forecasting advantages that investors need to know. 
Fundamental Analysis
Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Markets
What Is A Cash Flow Statement?
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. 
Markets
Understanding The P/E Ratio
Learn what the price/earnings ratio really means and how you should use it to value companies. 
Economics
Understanding CostVolume Profit Analysis
Business managers use costvolume profit analysis to gauge the profitability of their company’s products or services. 
Fundamental Analysis
5 MustHave Metrics For Value Investors
Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know. 
Investing
What Investors Need to Know About Returns in 2016
Last year wasn’t a great one for investors seeking solid returns, so here are three things we believe all investors need to know about returns in 2016. 
Stock Analysis
Analyzing Google's Return on Equity (ROE) (GOOGL)
Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS

What is Fibonacci retracement, and where do the ratios that are used come from?
Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >> 
What is the formula for calculating EBITDA?
When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >> 
How do I calculate the P/E ratio of a company?
The priceearnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >> 
How do you calculate return on equity (ROE)?
Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >> 
How do you calculate working capital?
Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >> 
What is the formula for calculating the current ratio?
The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>