6 Basic Financial Ratios and What They Reveal

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financial ratios list

A higher coverage ratio implies that a business can support its debt and related commitments effortlessly. For example, a company that pays out $5 in cash dividends per share for shares valued at $50 each are offering investors a dividend yield of 10%. Efficiency ratios or financial activity ratios give you a sense of how thoroughly a company Best Accounting Software For Nonprofits 2023 is using the assets and resources it has on hand. In other words, they can tell you if a company is using its assets efficiently or not. So a company that has $25,000 in debt and $100,000 in assets, for example, would have a debt ratio of 0.25. This ratio tells investors how much debt a company has in relation to how much equity it holds.

  • It shows the value of the total liabilities of a company compared to the amount of money invested by shareholders.
  • Liquidity ratios include the current ratio, quick ratio, and working capital ratio.
  • Some commonly used liquidity ratios are the quick ratio, the cash ratio, and the current ratio.
  • That means it has enough cash on hand to pay 20% of its current liabilities.

Finland maintains its longstanding gender parity on Educational Attainment. The recent tenure of a female head of state and parity at ministerial position boosts parity on Political Empowerment to 70%, which is the fourth highest score on this pillar globally. Yet, progress on Economic Participation and Opportunity (78.3%) seems to be stagnating, marked by slight reversals in parity at senior positions and wage equality since the last edition. However, women have been representing 50% or more of technical positions since the inaugural 2006 edition. On the other hand, like several other high-income economies,3 the healthy life expectancy of women declined by almost 1.5 years since 2006, partly widening the present gender gap on Health and Survival (97%).

Performance by region

Namibia, Rwanda and South Africa, along with 13 other countries, have closed more than 70% of the overall gender gap. The Democratic Republic of the Congo, Mali and Chad are the lowest-performing countries, with scores below 62%. And while there has been progress of 0.5 percentage points or more in 17 out of 36 countries, scores for 17 countries have seen decline of 0.5 percentage points or more since the last edition. Based on the constant sample, this marks a marginal improvement of 0.1 percentage points. At the current rate of progress, it will take 102 years to close the gender gap in Sub-Saharan Africa.

CFI’s Financial Ratios Definitive Guide provides a focused look at 30+ of the most essential financial ratios that a Financial Analyst uses to analyze a business. Within its pages, finance professionals can quickly look up the ratios and find definitions, formulas, in-depth explanations, and examples. Financial ratios may not be directly comparable between companies that use different accounting methods or follow various standard accounting practices.

So what is the financial ratio used to assess a company’s liquidity?

Most profitability ratios determine a company’s return on investment from their inventory and other assets, and so are related in some ways to that company’s business efficiency. A P/E ratio measures the relationship of a stock’s price to earnings per share. A https://turbo-tax.org/law-firm-finances-bookkeeping-accounting-and-kpis/ lower P/E ratio can indicate that a stock is undervalued and perhaps worth buying, but it could be low because the company isn’t financially healthy. It is the measure of a company’s ability to pay off current liabilities with the available current assets.

  • When looking at the subset of 145 countries included in both 2022 and 2023, the number of economies with full gender parity in Educational Attainment has increased from 21 to 25.
  • Overall, there is a decline of 0.2 percentage points in the regional score based on the constant sample of countries.
  • A company can perform ratio analysis over time to get a better understanding of the trajectory of its company.
  • Third, ratio analysis can be performed to strive for specific internally-set or externally-set benchmarks.
  • An average investor concludes that investors are willing to pay $100 per $1 of earnings ABC generates and only $10 per $1 of earnings DEF generates.

Ranked 43rd, the United States has closed 74.8% of its overall gender gap. On Educational Attainment, the country is at parity or virtually at parity across all levels of education except secondary education. On the Economic Participation and Opportunity subindex (78%), the United States has recovered almost to its 2018 level of parity.

Profitability Ratios

Based on the constant sample of countries covered by the index since 2006, that is a 1.1 percentage-point improvement since the last edition. Pakistan, India, the Maldives and Nepal have improved by varying degrees. All four countries have bettered their sex ratios at birth, with Pakistan and India making the most improvement. Accounting for Startups: 7 Bookkeeping Tips for Your Startup No country except Sri Lanka has attained full parity in healthy life expectancy. North America has achieved the highest gender parity score among all regions, 77.6%, on the Economic Participation and Opportunity subindex. This marks a 0.2 percentage-point increase in the parity score since the last edition.