Financial Analysis & Ratios
Reading the business scoreboard - numbers tell stories
Ratio Analysis Fundamentals
Understanding what ratios tell us about business health
Liquidity Ratios
Can the company pay its short-term obligations?
Liquidity Ratios Overview
Measuring short-term financial health
Current Ratio
PopularCurrent Assets / Current Liabilities
Quick Ratio (Acid-Test)
More conservative liquidity measure
Working Capital
The cushion for operations
Solvency Ratios
Can the company survive long-term?
Solvency Ratios Overview
Long-term financial health indicators
Debt Ratio
Total Liabilities / Total Assets
Debt-to-Equity Ratio
Financial leverage measurement
Times Interest Earned
Can the company cover its interest?
Profitability Ratios
Is the company making money efficiently?
Profitability Ratios Overview
Measuring earnings performance
Profit Margin
PopularGross, operating, and net margins
Return on Assets (ROA)
How efficiently assets generate profit
Return on Equity (ROE)
PopularReturns to shareholders
Earnings Per Share (EPS)
Profit allocated to each share
Efficiency Ratios
How well does the company use its resources?
Advanced Analysis
Deeper insights and investor metrics
Practice Financial Statement Analysis
Build and analyze financial statements with interactive exercises in our Learning Lab.
Try It in the Learning Labโ