Financial ratios measure liquidity, activity, leverage, and profitability of a company as a ratio to be able to compare it to other companies, other sectors, and other times.
by William C. Spaulding
Liquidity measures measure a firms ability to pay operating expenses and other short-term, or current, liabilities.
by William C. Spaulding
Activity ratios measure company sales per another asset account - the most common asset accounts used are accounts receivable, inventory, and total assets...
by William C. Spaulding
The amount of a companys debt affects its profitability and its ability to grow. Debt also incurs risk for both creditors and stockholders because of the potential for default, especially in hard economic times, ...
by William C. Spaulding
The best measure of a company is its profitability, for without it, it cannot grow, and if it does not grow, then its stock will trend downward.
by William C. Spaulding