Learn how to assess a company's financial strength using the EBITDA-to-interest coverage ratio, focusing on its ability to meet interest obligations easily.

Financial ratios allow you to break down your company's financial statements and see how it is performing from different angles. Whether you are creating a proposal for new investors, seeking bank ...

There are two basic methods of accounting that businesses use to track and report revenues: the cash basis and the accrual basis. Under the accrual basis, revenues are recorded on a company's income ...

The inventory turnover ratio shows how efficiently a firm has used its inventory. This is important in a small business, where storing excess inventory can be an unwanted burden and cost. Calculate ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

The K-Ratio measures the consistency and quality of an investment's returns over time, providing more detail than traditional metrics like the Sharpe ratio. It evaluates risk-adjusted performance by ...

The compression ratio isn't just a number: it's one of the greatest determining factors in engine building. Compression ratio determines the type of fuel, how much boost, and has a significant ...

To calculate your debt-to-income ratio, add up your monthly debt payments and divide this figure by your gross monthly income. While every lender and product will have different ranges, a DTI of 50 ...

How well can current assets cover current liabilities? Reviewed by Amy Drury The acid-test ratio (ATR), also commonly known as the quick ratio, measures the liquidity of a company by calculating how ...