Size up potential investments with profitability ratios, liquidity ratios, solvency ratios, and valuation ratios. Use them in combination for a comprehensive view.

One of the key metrics used to gauge the efficiency of a business is the activity ratio. This type of financial measurement ...

A gearing ratio measures a company's level of debt. Here are some guidelines for a good, bad, or normal gearing ratio.

In cell B5, input the formula "=B3/B4" to divide your assets by your liabilities, and the calculation for the current ratio will be displayed. Example of Calculating the Current Ratio in Excel Let ...

The formula for P/E ratio is as follows: Now that we know the formula, let’s walk through calculating the P/E ratios of two similar stocks. Imagine there are two companies (Company X and Company ...

Many brokerage firms automatically calculate your portfolio's Sharpe ratio. However, investors should still know what goes into this metric. Knowing what constitutes the Sharpe ratio can help ...

The following examples of applications of the Sortino ratio formula demonstrate how calculating risk-adjusted returns can benefit investors. The first example is a bond portfolio that has achieved ...

Let’s calculate Apple’s current ratio as of March 27th, 2021. To calculate the current ratio, we’ll include all current assets in the numerator. These figures can be found on Apple’s ...

Leverage ratios are metrics that express how much of a company's operations or assets are financed with borrowed money. Businesses cost a lot of money to run, and that money has to come from ...