Financial ratios

Performance ratios

• What return is the company making on its capital investment?
• What are its profit margins?

Working capital ratios

• How quickly are debts paid?
• How many times is inventory turned?

Liquidity ratios

• Can the company continue to pay its liabilities and debts?

Solvency ratios (Longer term)

• What is the level of debt in relation to other assets and to equity?
• Is the level of interest payable out of profits?