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Here is a thread of TEN ratios to know when looking at financial statements!
Knowing these will make you a more intelligent investor!
#FinancialFreedom #financeTips
Knowing these will make you a more intelligent investor!
#FinancialFreedom #financeTips
Return on Assets (ROA) 
Gives us a good description of how a companies net income compares to its total assets.
Equation: Net income / Total Assets
Gives us a good description of how a companies net income compares to its total assets.
Equation: Net income / Total Assets
Gross Margin Ratio 
A profitability ratio that shows how a company is efficiently utilizing its assets to produce more profit.
(Total Revenue - COGS) / Total Revenue
A profitability ratio that shows how a company is efficiently utilizing its assets to produce more profit.
(Total Revenue - COGS) / Total Revenue
Acid-Test or Quick Ratio 
Measures the ability of how fast a company uses its cash to pay off debts.
(Current Assets - Inventory) / Current Liabilities
Measures the ability of how fast a company uses its cash to pay off debts.
(Current Assets - Inventory) / Current Liabilities
