The Treynor ratio is a tool in portfolio analysis that helps investors assess how well a portfolio compensates them for taking on market risk, also known as systematic risk. This portfolio ratio shows ...

A quick ratio tests a company’s current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term ...

When deciding which companies to invest in, you can use several ratios to gauge their financial health. Debt-to-capital ratio is a way to measure a company’s ability to withstand downturns based on ...

Analysts use a variety of metrics to measure the effectiveness of sales activities. Companies use the data these metrics generate to evaluate profits, market share and other factors that determine a ...

What does the current ratio show? The current ratio shows a company’s ability to pay off debt. It can have a significant impact on how traders and investors see a company, which means the ratio can ...

A quick ratio is a metric used to calculate a company's liquidity and how easily it could pay off its debts. A quick ratio works by providing a relatively fast assessment of a company's financial ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

What is the price-to-earnings ratio? The price-to-earnings ratio, or P/E ratio for short, is a method of measuring a company’s value. The P/E ratio is calculated by dividing the company’s market value ...

According to the CFA Institute, a balance sheet-based accruals ratio is "the difference between net operating assets at the end and the beginning of the period compared to the average net operating ...

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. Diane Costagliola is a researcher, ...

Interest coverage ratio is useful for giving a quick snapshot of a company's ability to pay its interest obligations. The number gives analysts an overview of a company's financial strength. Generally ...