Analyzing Your Financial Health Using Personal Financial Ratios

    by Charles J. Farrell

    Analyzing Your Financial Health Using Personal Financial Ratios Splash image

    Investors commonly use stock ratios such as price to earnings, price to book, and dividend yield to assess the financial health of a company. The reasons the ratios are so widely used are because they convey a great deal of information in a concise format and allow investors to benchmark a company’s financial status.

    When it comes to assessing the financial health of individuals, however, there are no comparable ratios that would allow investors to conduct a similar analysis of their personal financial circumstances.

    This article establishes a set of personal financial ratios that individuals can use to analyze their financial standing.

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