What Are the Types of Liquidity Ratios? There are several ratios available for analysis, all of which compare theliquid assetsto the short-term liabilities. The most widely usedsolvencyratiosare the current ratio,acid test ratio(also known as the quick ratio) and cash ratio. ...
A PE ratio of 5 is both good and bad. It's good because the stock is trading at a very cheap valuation, just 5x EPS. However, very low P/E ratios typically indicate a company with very little growth potential or possibly one that will decrease in size in the future. ...
Financial statementsCredit managementRatio analysis of financial statements isn't a beanbag. But it needn't be Rubik's Cube either. Many of the ratios in use today subtract from rather than add to our analysis by obscuring the really important ratios and inviting unwarranted speculation on some ...
Z-Score Financial Ratios
After consulting his mentor; he decided to find out the PEG ratios of the companies separately. Hence, the trader noted down the details separately for both the companies in a tabular form for a comparative view: CategoryCompany XCompany Y Price per share $50 $60 EPS current year $3.0 $...
Expense ratios have been falling for years, as cheaper passive ETFs have claimed more assets, forcing traditionally more expensive mutual funds to lower their expense ratios. You can see the figures for both mutual funds and ETFs in the chart below. ...
however, there is ample evidence that low-cost passive funds that employ an indexing strategy often outperform active management, especially after accounting for fees and taxes. For active funds, expense ratios that are high need to be justified by extraordinary returns, or must confer some other ...
Debt ratios also apply to individuals’ financial status. Of course, each person’s circumstance is different, but as a rule of thumb, different types of debt ratios should be reviewed, including: Non-mortgage debt–to-income ratio– This indicates what percentage of a person’s income is use...
A higher interest coverage ratio is usually desirable because it means a company can better fulfill its financial obligations. But, this isn't always a hard-and-fast rule because this metric can be fluid. Higher ratios are better for companies and industries that are susceptible to volatility. ...
When evaluating stocks, those that have a PEG ratio below 1.0 are considered to be undervalued and could be a potential investment opportunity. With all financial ratios, it's best not to use them in isolation but along with others to get a complete picture of an asset. Sponsored Trade on...