Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...

The quick ratio, often referred to as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. It's calculated as (cash + ...

Financial ratios provide business owners with a quantitative analysis of their company's financial information. Business owners can also use financial ratios to create benchmarks for comparative ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

Financial ratios allow you to break down your company's financial statements and see how it is performing from different angles. Whether you are creating a proposal for new investors, seeking bank ...

Ratio analysis assesses company performance using financial ratios. ITW improved profit margins and FCF through strategic alignment. ITW's stock outperformed S&P 500 over a decade, showing strategic ...

Liquidity ratios assess if a company can cover short-term debts with available assets. Key ratios include cash, quick, current, and operating cash flow ratios. A liquidity ratio over 1 suggests a ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Amy is an ACA and the CEO and founder of ...

The current ratio is a widely understood financial metric, familiar even to those with a basic knowledge of banking and finance. It is routinely used by bankers during the credit appraisal process for ...