by CI Staff
Ratio analysis forms the cornerstone of fundamental stock analysis. There are a variety of ratios that analysts use to judge the attractiveness of a company as an investment. Ratios can help evaluate a company’s liquidity, profitability, debt levels, cash flow, valuation, and operating performance.
Operating performance ratios look at how well a company turns its assets into revenue as well as the efficiency by which it converts merchandise into cash. When using these ratios, it is important to consider both short-term assets, such as inventory and accounts receivables, and long-term assets such as property, plant and equipment. In general, the better these ratios, the better the company is and the better it is for shareholders.
...To continue reading this article you must be a Computerized Investing Subscriber.
Already a CI subscriber? Login to read the rest of this article.
A subscription to Computerized Investing includes a monthly email and access to the CI Website, all of which aim to benefit your investing skills with respect to computers and the Internet.