Financial Ratios & Analysis Financial Terms & Definitions

24 terms in this topic

Financial ratios and analysis is a category of glossary terms that covers tools and methods used to interpret financial statement data, such as liquidity, profitability, and solvency ratios. It includes definitions of key metrics like the current ratio, return on equity, and debt-to-equity ratio, which help investors and analysts assess a company’s operational efficiency and financial stability.

D

Debt-to-equity

The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder equity. It…

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E

EBIT

EBIT, an acronym for Earnings Before Interest and Taxes, is a key profitability metric that measures a company’s operating performance…

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E

EV/EBITDA

The EV/EBITDA ratio is a valuation multiple that compares a company’s enterprise value (EV) to its earnings before interest, taxes,…

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G

Gross margin

Gross margin is a key financial metric that shows how efficiently a company produces and sells its products. It measures…

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Asset turnover Asset turnover is a financial ratio that measures how efficiently a company uses its assets to generate sales… Cash conversion cycle The Cash Conversion Cycle (CCC) is a key financial metric that measures the time it takes for a… Current ratio The current ratio is a financial metric used to measure a company’s ability to pay its short-term obligations… Days sales outstanding (DSO) Days Sales Outstanding (DSO) is a financial ratio that measures the average number of days it takes a… Debt-to-equity The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder… Dividend payout ratio The dividend payout ratio is a financial metric that measures the proportion of a company’s earnings distributed to… DuPont analysis The DuPont analysis is a framework for breaking down the fundamental drivers of Return on Equity (ROE) into… EBIT EBIT, an acronym for Earnings Before Interest and Taxes, is a key profitability metric that measures a company’s… Enterprise value (EV) Enterprise Value (EV) is a comprehensive measure of a company’s total value, often used as a more complete… EV/EBITDA The EV/EBITDA ratio is a valuation multiple that compares a company’s enterprise value (EV) to its earnings before… Free cash flow yield Free cash flow yield is a financial ratio that measures how much free cash flow a company generates… Gross margin Gross margin is a key financial metric that shows how efficiently a company produces and sells its products.…