Financial ratios are essential tools that help investors evaluate the performance of a company and make informed decisions when analyzing stocks. These ratios provide a snapshot of a company’s financial health, efficiency, profitability, and risk. By understanding how these ratios work, investors c...
Blog by PriyaSahu
Dividend Yield is a financial ratio that shows how much income (in the form of dividends) you can expect to earn from an investment, expressed as a percentage of the current market price of a stock or security. It helps investors understand the return on investment they are getting through dividend...
The Interest Coverage Ratio (ICR) is a financial metric used to measure a company’s ability to meet its interest payments on outstanding debt. It shows how many times a company can pay its interest expenses with its earnings before interest and taxes (EBIT). A higher ratio indicates better financia...
The Interest Coverage Ratio (ICR) is a financial metric used to measure a company’s ability to meet its interest payments on outstanding debt. It shows how many times a company can pay its interest expenses with its earnings before interest and taxes (EBIT). A higher ratio indicates better financia...
The inventory turnover ratio is a key metric for understanding how efficiently a company is managing its inventory. It shows how often a company’s inventory is sold and replaced over a specific period, usually a year. A higher ratio indicates that a company is selling goods quickly, while a lower r...
Gross margin is a key financial metric that shows how well a company generates revenue from direct costs, like producing and delivering its products or services. It’s calculated by subtracting the cost of goods sold (COGS) from total revenue, and then dividing that by total revenue to get a percent...
Net Profit Margin is a financial ratio that measures the profitability of a company. It shows how much profit a company makes for every dollar of revenue it generates. A higher net profit margin indicates that the company is efficiently converting its revenue into profit, while a lower margin sugge...
Free Cash Flow (FCF) is an important financial metric that shows how much cash a company has left over after covering its operating expenses and capital expenditures (CapEx). It’s a vital measure for investors because it indicates the money a company can use to pay dividends, reinvest in its busine...
Operating Margin is an important financial metric that helps investors assess how efficiently a company is managing its core business operations. It tells you what percentage of revenue is left after covering the costs of goods sold (COGS) and operating expenses, but before accounting for taxes and...
Earnings Per Share (EPS) is an important financial metric that helps investors assess a company's profitability. It represents the portion of a company’s profit allocated to each outstanding share of common stock. EPS is often used by investors to determine the financial health of a company and its...
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to evaluate a company’s profitability by excluding non-operating expenses and non-cash charges like depreciation and amortization. EBITDA provides a clearer picture of a company's core o...
Return on Assets (ROA) is a financial ratio that measures how efficiently a company utilizes its assets to generate profit. It shows the relationship between a company’s net income and its total assets, offering insight into how well a business is converting its investments into earnings. For inves...
Return on Equity (ROE) is a key financial metric that evaluates a company's ability to generate profits from its shareholders’ equity. ROE measures the efficiency of a company in utilizing its equity investments to produce net income. It is one of the most widely used profitability ratios and is an...
The quick ratio, also known as the acid-test ratio, is a financial metric that measures a company’s ability to meet its short-term obligations using its most liquid assets. It is a more stringent measure of liquidity than the current ratio because it excludes inventory from assets, which may not b...
The current ratio is a key liquidity ratio used in financial analysis to measure a company's ability to pay off its short-term liabilities with its short-term assets. It helps assess whether a company has enough resources to cover its debts that are due within the next 12 months. A higher current r...
The debt-to-equity (D/E) ratio is a key financial metric that helps investors assess a company’s financial leverage. By comparing a company’s total debt to its equity, this ratio indicates how much debt a company is using to finance its assets. Understanding the D/E ratio is essential for evaluatin...
The Price-to-Earnings (P/E) ratio is an important metric that investors use to evaluate a company’s stock price in relation to its earnings. A high P/E ratio often catches the eye of investors, but what exactly does it mean? A higher P/E ratio can indicate several things about a company’s financial...
The Price-to-Earnings (P/E) ratio is one of the most widely used metrics by investors to evaluate the value of a company’s stock. It provides insight into how much investors are willing to pay for each dollar of a company's earnings. The P/E ratio helps determine whether a stock is overvalued, unde...
Exchange-Traded Funds (ETFs) and Index Funds are two popular investment vehicles that allow investors to gain exposure to a broad range of assets, such as stocks, bonds, and commodities. Both of these funds are considered to be low-cost and diversified, but they differ in terms of structure, tradin...
An Exchange Traded Fund (ETF) is an investment fund that is traded on stock exchanges, similar to individual stocks. ETFs hold a collection of assets such as stocks, bonds, or commodities, and offer a convenient and cost-effective way to diversify investments. They combine the benefits of mutual fu...
Categories
- Stock Market
(6624)
