Financial ratios are the most powerful tool for investors, business owners, and managers alike to measure an organization's performance. Knowing how to calculate and analyze them is a crucial skill that every professional should possess, especially those who want to make informed decisions that direc...
Some lenders may focus on a borrower’s mortgage principal andinterestpayments while others may require a broad analysis of housing costs. Total housing expense is used in one of the two key financial ratios used by mortgage lenders to determine whether a borrower can afford a home. Total Housi...
What these ratios have in common is they all measure, in some form or another, the degree to which a firm's activities are funded by debt versus equity financing. How to Calculate a Gearing Ratio The most comprehensive ratio is the debt-to-equity gearing formula as this takes all forms...
Now that you know how to calculate your loan-to-value and combined loan-to-value ratios and how you can impact them, you can make more informed choices to help you reach your financial goals, whether you choose to borrow from the equity in your home, refinance or simply continue to pay...
A leverage ratio is a type of financial measurement used in finance, business, and economics to evaluate the level of debt relative to another financial metric.
Now that you know how to calculate your loan-to-value and combined loan-to-value ratios and how you can impact them, you can make more informed choices to help you reach your financial goals, whether you choose to borrow from the equity in your home, refinance or simply continue to pay...
When doing financial analysis, it is common to calculate ratios in Excel. We need to find ratios not just in financial analysis but also in many other situations (such as screen sizes or room dimensions). In this article, I will show you a couple of simple ways to calculate ratios in Ex...
When you apply for a loan or consult a financial expert, you might hear the term debt-to-income ratio, or DTI ratio for short. But what does debt-to-income ratio mean? And why does it matter? Here’s some helpful information about DTI ratios, including how to calculate your own ratio...
The EBIT margin, also known as the operating margin, is a financial ratio that measures profitability without considering the effects of interest and taxes. It's easy to calculate: divide EBIT by sales or net earnings. A company’s operating margin tells you how much profit it makes after su...
How is the debt-to-income ratio calculated? DTI can be calculated in a variety of ways. Many accounting programs integrate this type of metric. However, if you want to calculate it manually, it is also possible: you first need to add up all your monthly debts for the manual calculation....