Financial ratio

Financial ratios refer to comparisons of one figure from a firm's financial statement with another in order to gauge its performance and health.

Figure illustrating financial ratios applied to Shingard, Inc. 2011 account statements. | Financial ratio, Accounting, Bookkeeping business

A financial ratio is a metric usually given by two values taken from a company's financial statements that compared give five main types of insights for an organization. Things such as liquidity, profitability, solvency, efficiency, and valuation are assessed via financial ratios. Those are metrics that can help internal and external management to make informed...

Quick Note: Although there are hundreds of points to check while picking a stock to invest, however, most of them can be categorized among the ten questions listed below. Anyways, by no means, I claim that this is the best checklist for picking stocks. My suggestion would be to study the investment checklist given below, improvise and make your own list of questions. Further, for simplicity, I’ve not included financial ratios.

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Accounting ratios (financial ratios) are calculated within a firms financial statement to see how profitable it is, and whether it can pay off its debts.

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