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What are the 7 types of ratio analysis? ›
Example of Ratio analysis
| Type of Ratio | Formula | Ratio |
|---|---|---|
| Net Profit Margin | (Net Profit / Revenue) × 100 | 26.67% |
| Return on Equity (ROE) | (Net Profit / Shareholders' Equity) × 100 | 80% |
| Current Ratio | Current Assets / Current Liabilities | 2.67 |
| Quick Ratio (Acid-test Ratio | (Current Assets - Inventory) / Current Liabilities | 2.17 |
Apr 10, 2024
Ratios include the working capital ratio, the quick ratio, earnings per share (EPS), price-earnings (P/E), debt-to-equity, and return on equity (ROE). Most ratios are best used in combination with others rather than singly to accomplish a comprehensive picture of a company's financial health.
What are the most important banking ratios? ›Common ratios to analyze banks include the price-to-earnings (P/E) ratio, the price-to-book (P/B) ratio, the efficiency ratio, the loan-to-deposit ratio (LDR), and capital ratios.
What is 7 Eleven financial ratio? ›SEVE Ratios
| Quick Ratio MRQ | 0.74 | 1.89 |
|---|---|---|
| Current Ratio MRQ | 1.16 | 2.53 |
| LT Debt to Equity MRQ | 124.81% | 61.46 |
| Total Debt to Equity MRQ | 389.04% | 205.24 |
Financial ratios fall into 6 broad categories: efficiency, liquidity, leverage, profitability, market value and coverage ratios.
What are the 5 major categories of ratios? ›The following five (5) major financial ratio categories are included in this list.
- Liquidity Ratios.
- Activity Ratios.
- Debt Ratios.
- Profitability Ratios.
- Market Ratios.
5 Essential Financial Ratios for Every Business. The common financial ratios every business should track are 1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.
What are the different types of financial ratios? ›What are the four types of financial ratios?
- Liquidity ratios.
- Activity ratios (also called efficiency ratios)
- Profitability ratios.
- Leverage ratios.
Remember, there are only 5 main ratios that you must be measuring:
- Gross profit margin.
- Operating profit margin.
- Net profit margin.
- Return on assets.
- Return on equity.
Nov 9, 2021
Here are some tips to remember the ratio analysis formulas to analyze financial statements quickly-
- Tip 1: Categorize the Ratios. To keep in mind the formulas of the ratio, categorization works well. ...
- Tip 2: Writing Down Each Ratio and Start Working on them. ...
- Tip 3: Understanding. ...
- Tip 4: Use Pictures.
May 7, 2022
What is a good PE ratio? ›
Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.
What ratios do banks look at? ›Bank-Specific Ratios
- Net Interest Margin = (Interest Income – Interest Expense) / Total Assets.
- Efficiency Ratio = Non-Interest Expense / Revenue.
- Operating Leverage = Growth Rate of Revenue – Growth Rate of Non-Interest Expense.
- Liquidity Coverage Ratio = High-Quality Liquid Asset Amount / Total Net Cash Flow Amount.
"I always recommend keeping your total debt-to-income ratio below 36%, which covers home loan payments and other debts," Hendrix said. So, if your monthly income is $5,000, your housing costs and other debts should be no more than $1,800 per month.
What ratios do investors look at? ›And that's what we'll explore here.
- Five key financial ratios for analyzing stocks.
- Price-to-earnings, or P/E, ratio.
- Price/earnings-to-growth, or PEG, ratio.
- Price-to-sales, or P/S, ratio.
- Price-to-book, or P/B, ratio.
- Debt-to-equity, or D/E, ratio.
- Finding your way.
Jan 23, 2023
5 Essential Financial Ratios for Every Business. The common financial ratios every business should track are 1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.
What is the 70 20 10 financial ratio? ›The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.
Which are the five major categories of ratios? ›The following five (5) major financial ratio categories are included in this list.
- Liquidity Ratios.
- Activity Ratios.
- Debt Ratios.
- Profitability Ratios.
- Market Ratios.