Key Ratio

AAA

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.

INVESTOPEDIA EXPLAINS '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
  1. Capital Adequacy Ratio - CAR

    A measure of a bank's capital. It is expressed as a percentage ...
  2. Current Ratio

    A liquidity ratio that measures a company's ability to pay short-term ...
  3. Tier 1 Capital

    A term used to describe the capital adequacy of a bank. Tier ...
  4. Liquidity Ratios

    A class of financial metrics that is used to determine a company's ...
  5. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
  6. Appraised Equity Capital

    The excess of the market value of an asset over its book value. ...
Related Articles
  1. Fundamental Analysis

    Ratio Analysis Tutorial

  2. Markets

    How To Use Price-To-Sales Ratios To ...

  3. Forex Education

    How To Use The P/E Ratio And PEG To ...

  4. Fundamental Analysis

    Dynamic Current Ratio: What It Is And ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center