Ratio analysis refers to a method of analyzing a company's liquidity, operational efficiency, and profitability by comparing line items on its financial statements.
 | | Term of the Day | Words to Know | | |  | | Ratio Analysis | Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing information contained in its financial statements. Ratio analysis is a cornerstone of fundamental analysis.
Outside analysts use several types of ratios to assess companies, while corporate insiders rely on them less because of their access to more detailed operational data about a company. | | Read More » | | Related to "Ratio Analysis" | | | | SPONSORED BY INVESCO | | The Complete Guide to ETFs | | ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. | | Learn More » | | | Fundamental Analysis | | Fundamental analysis is a method of measuring a stock's intrinsic value. Analysts who follow this method seek out companies priced below their real worth. | | Read More » | | | Liquidity Ratio | | Liquidity ratios are a class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital. | | Read More » | | | Solvency Ratio | | The solvency ratio is a key metric used to measure an enterprise's ability to meet its debt and other obligations. | | Read More » | | | Price-Earnings Ratio | | The price-to-earnings ratio (P/E ratio) is defined as a ratio for valuing a company that measures its current share price relative to its per-share earnings. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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