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 ...

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 ...

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 ...

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 ...

The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency. Because the current ratio compares short-term ...

Enterprise value is a common calculation of a company's worth that is more comprehensive than market capitalization. Enterprise value includes a company's debt, thus giving a fuller picture of a ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Interest coverage ratio is a measure that assesses a company's ability to manage the cost of its debt. Both investors and bank lenders use the interest coverage ratio to assess a company's financial ...

A gearing ratio is a measure used by investors to establish a company’s financial leverage. In this context, leverage is the amount of funds acquired through creditor loans – or debt – compared to the ...

What is a good current ratio? A good current ratio should be higher than one. This would indicate that the company can cover its liabilities with its assets. If the current ratio is lower than one, it ...

Simply put, the market value of a firm divided by capital invested. Market to Book Ratio seeks to show the value of a company, by comparing the book value and market value. Book value is calculated ...