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 ...

Andrew Bloomenthal has 20+ years of editorial experience as a financial journalist and as a financial services marketing writer. David Kindness is a Certified Public Accountant (CPA) and an expert in ...

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 ...

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 ...

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 ...

What is the price-to-earnings ratio? The price-to-earnings ratio, or P/E ratio for short, is a method of measuring a company’s value. The P/E ratio is calculated by dividing the company’s market value ...

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 ...

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 ...

Current ratio measures short-term asset coverage of liabilities, guiding investment decisions. Compare a company's current ratio across years and versus peers to assess financial health. Seasonal ...

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 ...

A debt-to-equity ratio is a number calculated by dividing a company's total debt by the value of its shareholders' equity. A debt-to-equity ratio is one data point used by investors and lenders to ...

The DSCR measures how well a company can service its debt with its current revenue. Here’s how to calculate it. In a nutshell, the Debt Service Coverage Ratio (DSCR) measures a company’s ability to ...