Stunning Financial Ratios For Dummies
It ties the current stock price to the companys net earnings.
Financial ratios for dummies. According to current Prompt Corrective Action PCA regulations a 7 or higher net worth ratio is a well capitalized credit union. The capital ratio specifically includes allowance for loan and lease losses whereas the net worth does not. How does financial ratio analysis work.
PriceEarnings Ratio The PE ratio price-to-earnings ratio is one of the most widely followed ratios and many consider it the most important valuation ratio and it can be considered a profitability ratio as well. Learn to calculate and interpret the credit unions key financial statement ratios. Commonly Used Debt Ratios and Formulas.
Common financial leverage ratios and the formulas for their calculation 1. Profit margin is one of the most important financial ratios for analysts and investors as it measures a companys profitability. Averages can vary between companies and industries.
152 Figuring out earnings per share. Debt Ratio Total Liabilities Total Assets measures the overall leverage of a company. Common Accounting Ratios There exist many accounting ratios used throughout the industry divided into subcategories like profitability ratios debt ratios and liquidity ratios among others.
Reading Financial Reports For Dummies. Understand the key elements of the credit unions balance sheet and income statement. Lets discuss ten of the most popular financial ratios that can help you find the story b.
Ratio is a liquidity measure and should be monitored in conjunction with a credit unions ALM strategy. Knowing that a share price is 213 doesnt tell you much. These relationships between the financial statement accounts help investors creditors and internal company management understand how well a business is performing and of areas needing improvement.