The profitability ratios include: operating profit margin, net profit margin, return on assets and return on equity. Profit margin measures how much a company earns…

Sometimes an increase in company earnings can disguise an operating loss. If a company’s operating expenses exceed its operating income; it has an operating loss….

When considering a company as a prospective investment you should review its financial statements. Pay particular attention to the profitability ratios. If you can, calculate…

The price to earnings ratio, or P/E, is figured by dividing the stock price by the company’s earnings per share (EPS). The P/E is a…

The current ratio provides an indication of how liquid a company may be in the coming year. To calculate it, take the current assets and…

The long-term debt to equity ratio can tell you how much debt a company is using to finance its operations. If this number is too…

Since companies can affect either the current ratio or the long-term debt to equity ratio by altering their mix of short-term and long-term debt, this…

A business will want to declare a high gross margin as it will mean that the gap between its costs and revenues/prices remains healthy. This…

They should be looked at against previous years results, the results of major rivals, the current rates of interest and returns on alternative investments and…

This ratio measures the relationship between the net profit declared and the sales or turnover of the company. If is quite close to the gross…