The Treynor ratio is a tool in portfolio analysis that helps investors assess how well a portfolio compensates them for taking on market risk, also known as systematic risk. This portfolio ratio shows ...

When deciding which companies to invest in, you can use several ratios to gauge their financial health. Debt-to-capital ratio is a way to measure a company’s ability to withstand downturns based on ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

What is the price-to-earnings ratio? The price-to-earnings ratio, or P/E ratio for short, is a method of measuring a company’s value. The P/E ratio is calculated by dividing the company’s market value ...

The current ratio is calculated by dividing a company’s current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency. Because the current ratio compares short-term ...

Interest coverage ratio is a measure that assesses a company's ability to manage the cost of its debt. Both investors and bank lenders use the interest coverage ratio to assess a company's financial ...

Analysts use a variety of metrics to measure the effectiveness of sales activities. Companies use the data these metrics generate to evaluate profits, market share and other factors that determine a ...

A gearing ratio is a measure used by investors to establish a company’s financial leverage. In this context, leverage is the amount of funds acquired through creditor loans – or debt – compared to the ...

Enterprise value is a common calculation of a company's worth that is more comprehensive than market capitalization. Enterprise value includes a company's debt, thus giving a fuller picture of a ...

The DSCR measures how well a company can service its debt with its current revenue. Here’s how to calculate it. In a nutshell, the Debt Service Coverage Ratio (DSCR) measures a company’s ability to ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Debt service coverage ratio (DSCR) is calculated by dividing your business’s total debt obligations by its net operating income. Many, or all, of the products featured on this page are from our ...