What are the 4 key financial ratios?
Ratios include the working capital ratio, the quick ratio, earnings per share (EPS), price-earnings (P/E), debt-to-equity, and return on equity (ROE). Most ratios are best used in combination with others rather than singly to accomplish a comprehensive picture of a company's financial health.
Ratios include the working capital ratio, the quick ratio, earnings per share (EPS), price-earnings (P/E), debt-to-equity, and return on equity (ROE). Most ratios are best used in combination with others rather than singly to accomplish a comprehensive picture of a company's financial health.
Sl.No | Particular | Formula |
---|---|---|
1 | Debt to Equity Ratio | {(Total Debt)/(Total Equity)} |
2 | Debt to Asset Ratio | {(Total Debt)/(Total Asset)} |
3 | Debt Ratio | {(Total Liabilities)/(Total Asset)} |
4 | Interest Coverage Ratio | {(Earnings before interest and taxes (EBIT))/(Interest Expense)} |
In general, there are four categories of ratio analysis: profitability, liquidity, solvency, and valuation. Common ratios include the price-to-earnings (P/E) ratio, net profit margin, and debt-to-equity (D/E). Financial ratios are essential to solid fundamental analysis.
- Liquidity ratios.
- Leverage ratios.
- Efficiency ratios.
- Profitability ratios.
- Market value ratios.
They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders' equity. Balance sheets show what a company owns and what it owes at a fixed point in time. Income statements show how much money a company made and spent over a period of time.
- Profitability Sustainability.
- Operational Efficiency.
- Liquidity.
- Leverage (Funding – Debt, Equity, Grants)
- Liquidity ratios.
- Activity ratios (also called efficiency ratios)
- Profitability ratios.
- Leverage ratios.
The 4 Ps of marketing are place, price, product, and promotion.
- Net working capital. Use it to: Calculate how much money you have to put back into your business after you pay off your short-term debt. ...
- Current ratio and quick ratio. ...
- Debt to asset ratio. ...
- Solvency ratio.
What are the four solvency ratios?
The main solvency ratios include the debt-to-assets ratio, the interest coverage ratio, the equity ratio, and the debt-to-equity (D/E) ratio. Solvency ratios are often used by prospective lenders when evaluating a company's creditworthiness as well as by potential bond investors.
For-profit businesses use four primary types of financial statement: the balance sheet, the income statement, the statement of cash flow, and the statement of retained earnings.
![What are the 4 key financial ratios? (2024)](https://i.ytimg.com/vi/Sydborb2CaE/hq720.jpg?sqp=-oaymwEcCNAFEJQDSFXyq4qpAw4IARUAAIhCGAFwAcABBg==&rs=AOn4CLAo31giRrq6BDoD2oHcZ9CeRN2Nhg)
- Liquidity Ratios.
- Activity Ratios.
- Debt Ratios.
- Profitability Ratios.
- Market Ratios.
- Price-Earnings Ratio (PE) This number tells you how many years worth of profits you're paying for a stock. ...
- Price/Earnings Growth (PEG) Ratio. ...
- Price-to-Sales (PS) ...
- Price/Cash Flow FLOW +1% (PCF) ...
- Price-To-Book Value (PBV) ...
- Debt-to-Equity Ratio. ...
- Return On Equity (ROE) ...
- Return On Assets (ROA)
Learn how these five key ratios—price-to-earnings, PEG, price-to-sales, price-to-book, and debt-to-equity—can help investors understand a stock's true value.
- Balance sheets.
- Income statements.
- Cash flow statements.
- Statements of shareholders' equity.
For-profit primary financial statements include the balance sheet, income statement, statement of cash flow, and statement of changes in equity.
Financial statements can be divided into four categories: balance sheets, income statements, cash flow statements, and equity statements.
- Growing revenue. Revenue is the amount of money a company receives in exchange for its goods and services. ...
- Expenses stay flat. ...
- Cash balance. ...
- Debt ratio. ...
- Profitability ratio. ...
- Activity ratio. ...
- New clients and repeat customers. ...
- Profit margins are high.
- Earnings per share (EPS) ...
- Price/earnings ratio (P/E) ...
- Return on equity (ROE) ...
- Debt-to-capital ratio. ...
- Interest coverage ratio (ICR) ...
- Enterprise value to EBIT. ...
- Operating margin. ...
- Quick ratio.
What are the 5 key accounting ratios?
The common financial ratios every business should track are 1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.
They are financial ratio which includes debt to equity ratio, liquidity ratios which include cash ratio, current ratio, quick ratio and efficiency ratios which include account receivable turnover, payable account turnover, inventory turnover ratio.
Note: The 4 C's is defined as Chart of Accounts, Calendar, Currency, and accounting Convention.
The marketing mix consists of four Ps (price, product, place, and promotion), four Cs (customer needs and wants, cost, convenience, and communication), and more. To get a better understanding of the marketing mix, we'll take a deeper dive into each of these areas to help you unlock the power behind it.
- Gross Profit Ratio Formula = Gross Profit/Net Sales*100.
- Debt Equity Ratio Formula = Total Debt/Shareholders Fund.
- Interest Coverage Ratio Formula = Ebit/Interest Expense.
- Quick Ratio Formula = Cash & Cash Equivalents+Marketable Securities+Accounts Receivables/Current Liabilities.