1. Currentratio= CA/CL 2. Liquid ratio= (CA- Prepayment-inventory)/CL Gearing ratios 1. Gearing= TL/TA 2. Gearing= TL/TE 3. Interest Cover ratio= Operating Profit/Interest Investor ratios 1. EPS= NPAT/No of ordinary shares 2. PE ratio= Market share price/EPS 3. Dividend cover ratio...
Financial Glossary Search View All Terms Price to Earnings Ratio (PE Ratio) The price to earnings ratio (PE Ratio) is the measure of the share price relative to the annual net income earned by the firm per share. PE ratio shows current investor demand for a company share. A high PE ra...
On the balance sheet, leverage ratios measure the financial leverage on the balance sheet of the company, or the reliance a company has on creditors to fund its operations. Simply put, the concept of financial leverage refers to the proportion of debt in the capital structure, rather than equi...
The range used to gauge the financial health of a company using the current ratio metric varies on the specific industry. For instance, supermarket retailers typically have low current ratios considering their business model (and free cash flows) are essentially a function of their ability to raise...
Financial Ratio Analysis›Expense Ratio What is an Expense Ratio? Contents [show] Definition: The expense ratio is an efficiency ratio that calculates management expenses as a percentage of total funds invested in a mutual fund. In other words, measures the percentage of your investment in the ...
EBIT stands for earnings before interest and taxes. It measures profitability while excluding financial and tax expenses. EBIT can measure a company’s financial performance and to compare it with other companies in its industry. It is also a component of somefinancial ratios, such as the EV/EBI...
Financial ratios are one of the essential tools for the company’s stakeholders to judge the company’s performance. It not only helps to compare two different companies but also helps to monitor the performance of the same company over the years. One of the essential financial ratios is the ...
Companies that don’t have lots of physical assets, such as technology companies, may have lower book-to-market ratios. Difference between Book-to-Market ratio and Market-to-Book Ratio The market-to-book ratio, which is also known as the price-to-book ratio, is the opposite of the book...
A main limitation of using P/E ratios is for comparing the P/E ratios of companies from varied sectors. Companies' valuation and growth rates often vary wildly between industries because of how and when the firms earn their money. As such, one should only use P/E as a comparative tool ...
Part of the Series Guide to Financial Ratios What Is the Return on Assets (ROA) Ratio? Return on assets (ROA) is a financial ratio that indicates how profitable a company is relative to its totalassets. Corporate management, analysts, and investors can use the return on assets ratio to det...