Financial ratios are powerful tools to help summarize financial statements and the health of a company. Browse Investopedia’s expert-written library to learn more.

Learn to assess a company’s financial health using key ratios and industry benchmarks. Discover how financial statements guide valuation decisions.

"If this ratio is 8 or lower, then it is a bargain, and if it is 6 or lower, then it is a very good bargain ," says Steven ...

Smart investors use financial ratios to analyze a company's financial performance before making an investment. Financial ratios reveal how a company is financed, how it uses its resources, its ability ...

The three inputs into a Sharpe ratio calculation are your expected return, the risk-free rate and the standard deviation.

Financial ratios express relationships between financial statement items. Although they provide historical data, management can use ratios to identify internal strengths and weaknesses, and estimate ...

A ratio compares two or more quantities by using parts of a whole. In this bracelet, there are 2 parts red compared to 3 parts blue. The ratio of red beads to blue beads is 2 : 3. This is said aloud ...