Tell me about some financial ratios and provide examples.

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Accepted Answer

Ratios are used to analyze financial performance and efficiency of a company.

Profit Margin: Net income divided by total revenue, shows how much profit a company makes for every dollar of sales.
Current Ratio: Current assets divided by current liabilities, measures a company's ability to pay its short-term obligations.
Debt-to-Equity Ratio: Total debt divided by total equity, indicates the proportion of debt used to finance a company's assets.
Return on Investment (ROI): Net profit divided by total investment, evaluates the efficiency of an investment.
Inventory Turnover Ratio: Cost of goods sold divided by average inventory, measures how quickly a company sells its inventory.