Watch the Ratios to make the Sense and beat Pros

1) Liquidity Measurement Ratios - Current Ratio - Quick Ratio - Cash Ratio - Cash Conversion Cycle 2) Profitability Indicator Ratios - Profit Margin Analysis - Effective Tax Rate - Return On Assets - Return On Equity - Return On Capital Employed 3) Debt Ratios - Overview Of Debt - Debt Ratio - Debt-Equity Ratio - Capitalization Ratio - Interest Coverage Ratio - Cash Flow To Debt Ratio 4) Operating Performance Ratios - Fixed-Asset Turnover - Sales/Revenue Per Employee - Operating Cycle 5) Cash Flow Indicator Ratios - Operating Cash Flow/Sales Ratio - Free Cash Flow/Operating Cash Ratio - Cash Flow Coverage Ratio - Dividend Payout Ratio 6) Investment Valuation Ratios - Per Share Data - Price/Book Value Ratio - Price/Cash Flow Ratio - Price/Earnings Ratio - Price/Earnings To Growth Ratio - Price/Sales Ratio - Dividend Yield - Enterprise Value Multiple

When asked about the Balance sheet analysis, Benjamin Graham asks all Investors to be extra Vigil about the Annual Report of the company. The International Norms and other Statutory requirements enforce the Listed Companies, to state most of the above ratios.


Each ratio is notifier and as the term ratio denotes, each of this ratios is a comparison Indicators. The Ratio Analysis basically simplifies the abstract Analysis, and is better Indicative of the underlying.


I will endeavour to briefly explain in 6 Parts in the coming week.