financial ratios cheat sheet
1. P/E Ratio | It is better if it is less than 25. |
2. Price-to-book Value | If it is less than or equals to 1.5, or lower as compared to peer companies in the same industry, then it is better |
3. Debt-to-equity Ratio | Please check if this is less than 1. |
4. Operating Profit Margin | It depends on the sector.A higher ratio is better. |
5. Price/Earnings Growth Ratio | It is better if it is greater than 10%. |
6. Return On Equity | Greater than 20% is preferred in this case. |
7. Interest Coverage Ratio | At least 2, higher the better. |
8. Current Ratio | Greater than 1 is preferable. |
9. Asset Turnover Ratio | Higher the better |
10. Dividend Yield | Around 4-6% is preferable. |
Financial Ratios Cheat Sheet Conclusion
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