Financial ratios are powerful tools to help summarize financial statements and the health of a company. Browse Investopedia’s expert-written library to learn more.

Smart investors use financial ratios to analyze a company's financial performance before making an investment. Financial ratios reveal how a company is financed, how it uses its resources, its ability ...

Bruns, William J., Jr. "Introduction to Financial Ratios and Financial Statement Analysis." Harvard Business School Background Note 193-029, August 1992. (Revised September 2004.) ...

Jared Ecker is a researcher and fact-checker. He possesses over a decade of experience in the Nuclear and National Defense sectors resolving issues on platforms as varied as stealth bombers to UAVs.

There are dozens of financial ratios and their meanings help business owners evaluate the financial health of a company. Financial ratios can be broken into six key areas of analysis: liquidity, ...