Glossary
Financial Ratios
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Metrics used to evaluate a company’s financial performance and position by comparing two relevant data points from financial statements, helping to assess areas like liquidity, profitability, and solvency. These ratios can provide quick insights into a company’s financial health and assist stakeholders in making informed decisions regarding investments, credit, and operational strategies. Commonly used financial ratios include the current ratio for liquidity, return on equity for profitability, and debt-to-equity for solvency, each offering a unique perspective on different aspects of the company’s financial stability and performance.