Financial Ratios Cheat Sheet

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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.

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