A quick ratio tests a company's current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term ...

The three inputs into a Sharpe ratio calculation are your expected return, the risk-free rate and the standard deviation.

The asset turnover ratio compares a company's total average assets to its total sales. The ratio helps investors determine how efficiently a company is using its assets to generate sales. The success ...

The Treynor ratio is a tool in portfolio analysis that helps investors assess how well a portfolio compensates them for taking on market risk, also known as systematic risk. This portfolio ratio shows ...

Inventory turnover is an indicator of a company’s revenue efficiency. It is the ratio defining how many times the inventory was sold and replaced in a given period of time. The inventory turnover ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

P/E ratio, or price-to-earnings ratio, is a quick way to see if a stock is undervalued or overvalued. And so generally speaking, the lower the P/E ratio is, the better it is for both the business and ...