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.

N

Net margin

Net margin, also known as net profit margin, is a key profitability ratio that measures how much of a company’s…

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P

PEG ratio

The PEG ratio (Price/Earnings to Growth ratio) is a fundamental financial metric used to evaluate a stock’s value by taking…

Full Definition
Interest coverage The interest coverage ratio (also known as times interest earned) is a financial metric that measures a company’s… Inventory turnover Inventory turnover is a key financial ratio that measures how many times a company sells and replaces its… Net margin Net margin, also known as net profit margin, is a key profitability ratio that measures how much of… Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… PEG ratio The PEG ratio (Price/Earnings to Growth ratio) is a fundamental financial metric used to evaluate a stock’s value… Price-to-book (P/B) The Price-to-Book (P/B) ratio is a financial ratio used to compare a company’s market value to its book… Price-to-earnings (P/E) The price-to-earnings ratio, commonly known as the P/E ratio, is one of the most widely used metrics in… Price-to-sales (P/S) The Price-to-Sales (P/S) ratio is a valuation metric that compares a company’s stock price to its revenue per… Quick (acid-test) ratio The quick ratio, also known as the acid-test ratio, is a stringent measure of a company’s short-term liquidity.… Return on assets (ROA) Return on Assets (ROA) is a key profitability ratio that measures how efficiently a company uses its assets… Return on equity (ROE) Return on Equity (ROE) is a powerful financial ratio that measures a company’s profitability by revealing how much… Return on invested capital (ROIC) Return on Invested Capital (ROIC) is a key financial metric that shows how well a company turns the…