Key Concepts:

Liquidity Ratios: Measure a company's ability to meet short-term obligations.

Current Ratio: Current Assets/Current Liabilities\text{Current Assets} / \
text{Current Liabilities}Current Assets/Current Liabilities
Quick Ratio: (Current Assets−Inventories)/Current Liabilities(\text{Current
Assets} - \text{Inventories}) / \text{Current Liabilities}
(Current Assets−Inventories)/Current Liabilities
Profitability Ratios: Assess a company's ability to generate profit.
Net Profit Margin: Net Income/Revenue\text{Net Income} / \
text{Revenue}Net Income/Revenue
Return on Assets (ROA): Net Income/Total Assets\text{Net Income} / \text{Total
Assets}Net Income/Total Assets
Return on Equity (ROE): Net Income/Shareholder’s Equity\text{Net Income} / \
text{Shareholder's Equity}Net Income/Shareholder’s Equity
Leverage Ratios: Measure the extent of a company's financing through debt.
Debt-to-Equity Ratio: Total Debt/Shareholder’s Equity\text{Total Debt} / \
text{Shareholder's Equity}Total Debt/Shareholder’s Equity
Interest Coverage Ratio: EBIT/Interest Expense\text{EBIT} / \text{Interest
Expense}EBIT/Interest Expense
Efficiency Ratios: Evaluate how effectively a company uses its assets.
Asset Turnover Ratio: Revenue/Total Assets\text{Revenue} / \text{Total
Assets}Revenue/Total Assets
Inventory Turnover Ratio: Cost of Goods Sold/Average Inventory\text{Cost of
Goods Sold} / \text{Average Inventory}Cost of Goods Sold/Average Inventory