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Financial Metrics

Financial metrics are measurements used to assess a company’s financial performance and health. These metrics include things like profits, revenues, expenses, debt, liquidity, and return on investment. They provide an insight into the financial standing of the company, and allow investors to make informed decisions about their investments.

Determinants of Supply: Key Factors Explained with Examples

The determinants of supply are crucial in economics, forming the foundation of functioning markets and the economy. Key determinants of pricing, labor, taxes, competition, suppliers, and technology cause the supply of goods and services to change.

Economic Value Added (EVA) Explained: Shareholder Value

Economic value added, or EVA is a sophisticated measure for assessing a company's financial performance and creating shareholder wealth by measuring the residual income after deducting the cost of capital.

Inventory to Sales Ratio Explained: Optimizing Stock Management

Inventory to Sales Ratio is a crucial financial metric indicating the relationship between a company's inventory and sales volume. It sheds light on the efficiency of inventory management and plays a significant role in assessing performance against industry benchmarks.

Income Elasticity Explained: Consumer Behavior in Economics

Income elasticity of demand is an economic measure showing how demand responds to consumer income changes. This metric helps businesses and economists understand how economic changes affect the demand for goods.

How Financial Leverage Works! Using Debt to Amplify Returns

Financial leverage refers to using borrowed funds to increase the potential return on investment. It magnifies potential gains and losses, vital to a company's capital structure.

Cash on Hand Explained: Cash is King for Businesses

Cash on Hand is a financial metric indicating the amount of liquid capital available to an individual or business. For businesses, it includes physical currency, funds in bank accounts, and liquid assets readily convertible to cash.

PEG Ratio Explained: Finding Growth at a Reasonable Price

The Price/Earnings to Growth (PEG) ratio helps investors find growth at a reasonable price. The PEG ratio is an incredibly valuable metric calculated by dividing the Price-to-Earnings (P/E) ratio by the company's earnings growth rate.

Price Floors in Economics: Understanding Minimum Prices

A price floor is a government-imposed limit on how low a price can be charged for a product, service, or commodity. This is designed to ensure the price stays high enough to protect the interests of producers, often at a point above the natural market equilibrium where supply equals demand.

Fixed Charge Coverage Ratio: Key Insights for Investors

FCCR is a financial metric determining how well a business can cover its fixed charges with its operating income. It is calculated by dividing Earnings Before Interest and Taxes (EBIT) by fixed charges. Fixed charges typically include expenses such as interest expense and lease payments.

Operating Profit Margin: Formula & Tips for Investors

Operating Profit Margin, often represented as a ratio or percentage, reflects the proportion of revenue after accounting for the costs and expenses associated with a company's primary operations.

Payout Ratio: Understanding Dividend Income Sustainability

The payout ratio, also known as the dividend payout ratio, is a critical financial metric that investors use to evaluate the sustainability of a company's dividend payments.

Total Asset Turnover: Understanding Business Efficiency

Total asset turnover is a financial metric used to assess a company's efficiency in using its assets to generate sales. It is a vital ratio for investors and analysts seeking to understand how well a company utilizes its asset base to produce revenue.

Times Interest Earned Ratio: Explaining Solvency & Risk

The Times Interest Earned Ratio, or TIE, is a financial metric for gauging a company's ability to settle its interest obligations. By assessing the number of times a company could theoretically cover its interest payments with its current pretax earnings, it offers a clear view of financial health, particularly regarding solvency and risk.

Dupont Analysis Explained: Company Financial Performance Models

By breaking down ROE into profitability, efficiency, and leverage factors, DuPont Analysis allows investors and analysts to pinpoint the strengths and weaknesses of a firm's financial health.

Return on Average Equity (ROAE): Company Profitability Explained

The Return on Average Equity (ROAE) financial ratio measures a company's profitability by comparing its net earnings to average shareholders' equity.

Debt-to-Capital Ratio: Understanding Financial Leverage

The debt-to-capital ratio measures a company's financial stability and leverage by comparing its total debt to its capital base, including debt and equity. It provides insight into what proportion of a company's operations is financed by debt versus shareholders' equity.

Debt-to-EBITDA Ratio & Calculator: Assessing Financial Health

The Debt-to-EBITDA ratio assesses a company's ability to pay off its debt. It compares a company's total debt to earnings before interest, taxes, depreciation, and amortization (EBITDA).

Long-Term Debt Ratio: Understanding Financial Stability

The Long-term debt ratio is a financial metric investors use to assess a company's use of long-term debt for financing its operations. A high long-term debt ratio over 25% indicates a higher investing risk, whereas a low ratio indicates a company is in better financial shape.

Understanding the Net Profit Ratio for Better Investing

The Net Profit Ratio is a key financial ratio for better investing, telling us how efficiently a company generates profit compared to its revenue and competitors.

Return on Common Stockholders Equity Insights for Investors

Return on Common Stockholder's Equity (ROCE) is a financial ratio measuring the profitability relative to the common equity shareholders have invested in a company.

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