Ratio analysis refers to a method of analyzing a company's liquidity, operational efficiency, and profitability by comparing line items on its financial statements.
 | | Term of the Day | Words to Know | | |  | | Ratio Analysis | | Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by studying its financial statements such as the balance sheet and income statement. Ratio analysis is a cornerstone of fundamental equity analysis. | | Read More » | | Related to "Ratio Analysis" | | | | Fundamental Analysis | | Fundamental analysis is a method of measuring a stock's intrinsic value. Analysts who follow this method seek out companies priced below their real worth. | | Read More » | | | Liquidity Ratio | | Liquidity ratios are a class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital. | | Read More » | | | Solvency Ratio | | The solvency ratio is a key metric used to measure an enterprise's ability to meet its debt and other obligations. | | Read More » | | | Price-Earnings Ratio | | The price-to-earnings ratio (P/E ratio) is defined as a ratio for valuing a company that measures its current share price relative to its per-share earnings. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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