Ratio Analysis: Using Financial Ratios
AAA
  1. Ratio Analysis: Introduction
  2. Ratio Analysis: Finding The Data
  3. Ratio Analysis: Using Financial Ratios

Ratio Analysis: Using Financial Ratios

There is a lot to be said for valuing a company, it is no easy task. If you have yet to discover this goldmine, the satisfaction one gets from tearing apart a companies financial statements and analyzing it on a whole different level is great - especially if you make or save yourself money for your efforts.

In this section we will try to present 19 basic fundamental analysis ratios to help you get started. The ratios are presented in a simplified manner to make them easier to understand. Sure some of the ratios have different varieties, but by the end you will understand the basic premise and reasons for fundamental analysis.

The Ratios:

Performance Activity
Book Value Per Common Share Asset Turnover
Cash Return On Assets Average Collection Period
Vertical Analysis Inventory Turnover
Dividend Payout Ratio Financing
Earnings Per Share Debt Ratio
Gross Profit Margin Debt / Equity Ratio
Price/Earnings Ratio Liquidity Warnings
Profit Margin Acid-Test Ratio
Return on Assets Interest Coverage
Return on Equity Working Capital

  1. Ratio Analysis: Introduction
  2. Ratio Analysis: Finding The Data
  3. Ratio Analysis: Using Financial Ratios
RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  3. Net Present Value - NPV

    The difference between the present value of cash inflows and ...
  4. Total Debt-to-Capitalization Ratio

    An indicator that measures the total amount of debt in a company’s ...
  5. Price-To-Cash-Flow Ratio

    The ratio of a stock’s price to its cash flow per share. The ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its ...
  1. To what extent should you take a company's liquidity ratio into account before investing ...

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying ...
  2. How is the Altman Z-Score used in fundamental analysis?

    Learn about the Altman Z-score, how it is calculated and how to interpret the Altman Z-score to assess the viability of a ...
  3. What does it mean when a company has a high capital adequacy ratio?

    Learn about the capital adequacy ratio, what the ratio measures, how it is calculated and what it means when a bank has a ...
  4. What is the difference between the capital adequacy ratio vs. the solvency ratio?

    Understand the different applications for using the capital adequacy ratio and the solvency ratio, which are both equity ...

You May Also Like

Related Tutorials
  1. Investing Basics

    Industry Handbook

  2. Fundamental Analysis

    Discounted Cash Flow Analysis

  3. Active Trading Fundamentals

    Introduction to Stock Trader Types

  4. Trading Strategies

    Guide to Pairs Trading

  5. Fundamental Analysis

    Guide To Excel For Finance

Trading Center