Financial Analysis. Lesson 9. Financial Ratios and Performance Metrics
<ol>
<li>Financial ratios provide insights into a company’s operational performance.
</li>
<li>Liquidity ratios assess a company's capacity to meet short-term obligations.
</li>
<li>Current ratio divides current assets by current liabilities for solvency.
</li>
<li>Quick ratio measures liquidity by excluding inventories from current assets.
</li>
<li>Asset turnover ratio evaluates how efficiently a company uses assets for revenue.
</li>
<li>Inventory turnover ratio shows how quickly inventory is sold and replaced.
</li>
<li>Debt-to-equity ratio compares total debt to shareholder equity, indicating leverage.
</li>
<li>Gross margin ratio calculates profitability by dividing gross profit by revenue.
</li>
<li>Return on equity (ROE) measures profitability relative to shareholders' investments.
</li>
<li>Interest coverage ratio assesses if earnings can cover interest expenses adequately.
</li>
</ol>
<hr />
Technical Examples:
<ol>
<li>Current ratio analysis indicates if a company can cover liabilities.
</li>
<li>Asset turnover ratio helps assess asset efficiency in generating revenue.
</li>
<li>ROE provides insight into profitability for shareholders.
</li>
</ol>

**Financial Analysis. Lesson 9. Financial Ratios and Performance Metrics**

1. **Financial ratios** provide insights into a company’s operational performance.
    
2. **Liquidity ratios** assess a company's capacity to meet short-term obligations.
    
3. **Current ratio** divides current assets by current liabilities for solvency.
    
4. **Quick ratio** measures liquidity by excluding inventories from current assets.
    
5. **Asset turnover ratio** evaluates how efficiently a company uses assets for revenue.
    
6. **Inventory turnover ratio** shows how quickly inventory is sold and replaced.
    
7. **Debt-to-equity ratio** compares total debt to shareholder equity, indicating leverage.
    
8. **Gross margin ratio** calculates profitability by dividing gross profit by revenue.
    
9. **Return on equity (ROE)** measures profitability relative to shareholders' investments.
    
10. **Interest coverage ratio** assesses if earnings can cover interest expenses adequately.
    

---

**Technical Examples:**

1. **Current ratio** analysis indicates if a company can cover liabilities.
    
2. **Asset turnover ratio** helps assess asset efficiency in generating revenue.
    
3. **ROE** provides insight into profitability for shareholders.

Financial Analysis. Lesson 9. Advanced Investment Appraisal Techniques