. What are financial ratios? Types of financial ratios How to use financial ratios What are main financial ratios? There are a number of financial ratios that can be used to assess the financial health of a company. Some of the most common include the following: -Gross profit margin: This ratio measures the percentage of … Read more
The profit/loss ratio is a financial ratio that measures the profitability of a company. It is calculated by dividing the company’s net income by its total revenue. A high profit/loss ratio indicates that a company is more profitable than its competitors. A low profit/loss ratio indicates that a company is less profitable than its competitors. … Read more
. Book Value Per Share: Definition, Formula, How to Calculate, and Example. How is BVPS calculated? BVPS stands for Book Value Per Share. It is calculated by dividing a company’s total book value by the number of shares outstanding. A company’s book value is the sum of its assets minus the sum of its liabilities. … Read more
The earnings yield is a financial ratio that measures the percentage of a company’s earnings that are available to shareholders as a dividend. The earnings yield can be calculated by dividing the company’s earnings per share by the stock’s price per share. For example, if a company has earnings per share of $1 and the … Read more
What is the efficiency ratio? The efficiency ratio is a financial metric used to assess a company’s ability to generate profits from its operations. It is calculated by dividing a company’s operating expenses by its operating income. A higher efficiency ratio indicates a more efficient company. What is efficiency in financial ratio? There are many … Read more
Capital Expenditure (CapEx) Definition: Capital expenditure (CapEx) is an expenditure that a company incurs to acquire or improve its assets. A company will typically incur CapEx as part of its ongoing business operations. CapEx can be divided into two categories: 1. Maintenance and repairs: These are costs associated with keeping an asset in good working … Read more
Discounted cash flow (DCF) valuation is a method of valuing a company or asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give them a present value, using a discount rate that reflects the riskiness of the cash flows. The sum of all future cash … Read more
The long-term debt-to-total-assets ratio measures the amount of a company’s long-term debt compared to its total assets. This ratio can be used to assess a company’s financial leverage and its ability to repay its debt obligations. A higher ratio indicates a greater amount of debt and a greater risk of financial distress. How do you … Read more
The operating expense ratio (OER) is a financial ratio that measures how much of a company’s revenue is spent on operating expenses. Operating expenses include things like rent, salaries, and utilities. The OER is calculated by dividing a company’s operating expenses by its revenue. A higher OER means that a greater percentage of the company’s … Read more
The information ratio is a statistical measure that helps investment managers and analysts compare the performance of different portfolios. The ratio is calculated by dividing the portfolio’s return by the standard deviation of the portfolio’s returns. The higher the information ratio, the better the portfolio’s performance. A portfolio with a higher information ratio is said … Read more
