5 Types of Financial Ratios for Evaluating Stocks

By using financial ratios, investors can explore various pieces of facts in the financial statement of a company and consists of calculating ratios from the financial statements. Market analysts mainly

The Quick Ratio

The quick ratio, also commonly referred to as the acid test ratio, is among the financial ratios typically used to assess a business's overall  short-term liquidity. It evaluates a company's

Return on Equity Ratio

Stakeholders hold the key to start a business and make way for its growth. That is why certain tools are employed to help them make decisions that can significantly affect

Receivable Turnover Ratio

The receivable turnover ratio or accounts receivable turnover ratio is among of activity ratios used to assess the ability of the business to convert accounts receivable into cash within a

Inventory Turnover Ratio

The inventory turnover ratio, also referred to as inventory turns, stock turnover, or stock turns,  is an efficiency metric that shows how long a business takes to sell all its

Asset Turnover Ratio

The asset turnover ratio is an essential financial ratio used to understand how effective a company is at using its assets to create revenue.  The ratio can be used to

Debt-to-Capital Ratio

The debt-to-capital ratio is among a group of leverage financial ratios that shows the proportion of debt a company uses to finance its assets, in relation to the amount of

Debt-to-Income Ratio

The debt-to-income ratio (DTI) is a tool that relates recurring monthly debt of an individual to their overall gross income. In this case, the gross income is the revenue before

Interest Coverage Ratio

The interest coverage ratio is a financial ratio that assesses a company's ability to pay the interest owed from debts. It is computed by dividing the earnings before interest and