A quick ratio tests a company’s current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term ...

The Treynor ratio is a tool in portfolio analysis that helps investors assess how well a portfolio compensates them for taking on market risk, also known as systematic risk. This portfolio ratio shows ...

The debt to asset ratio compares the total amount of debt a company holds to its assets. The ratio is used to determine to what degree a company relies on debt to finance its operations and is an ...

Ratio analysis assesses company performance using financial ratios. ITW improved profit margins and FCF through strategic alignment. ITW's stock outperformed S&P 500 over a decade, showing strategic ...

When deciding which companies to invest in, you can use several ratios to gauge their financial health. Debt-to-capital ratio is a way to measure a company’s ability to withstand downturns based on ...

Enterprise value is a common calculation of a company's worth that is more comprehensive than market capitalization. Enterprise value includes a company's debt, thus giving a fuller picture of a ...

Financial ratios are tools used to assess the relative strength of companies by performing simple calculations on items on income statements, balance sheets and cash flow statements. Ratios measure ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency. Because the current ratio compares short-term ...

What is the price-to-earnings ratio? The price-to-earnings ratio, or P/E ratio for short, is a method of measuring a company’s value. The P/E ratio is calculated by dividing the company’s market value ...

Analysts use a variety of metrics to measure the effectiveness of sales activities. Companies use the data these metrics generate to evaluate profits, market share and other factors that determine a ...

Caroline Banton has 6+ years of experience as a writer of business and finance articles. She also writes biographies for Story Terrace. Ebony Howard is a certified public accountant and a QuickBooks ...