1) Current Ratio

The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities
(debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current
ratio, the more capable the company is of paying its obligations.

2) Quick Ratio
An indicator of a companys short-term liquidity. The quick ratio measures a companys ability to
meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes
inventories from current assets

3) Asset Turnover Ratio

The amount of sales or revenues generated per dollar of assets. The Asset Turnover ratio is an
indicator of the efficiency with which a company is deploying its assets.
Asset Turnover = Sales or Revenues/Total Assets
Generally speaking, the higher the ratio, the better it is, since it implies the company is
generating more revenues per dollar of assets. But since this ratio varies widely from one
industry to the next, comparisons are only meaningful when they are made for different
companies in the same sector.
4) Fixed Turnover Ratio
A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a
company's ability to generate net sales from fixed-asset investments - specifically
property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover
ratio shows that the company has been more effective in using the investment in fixed
assets to generate revenues.
The fixed-asset turnover ratio is calculated as:

5) Inventory Turnover Ratio

A ratio showing how many times a company's inventory is sold and replaced over a period.
The days in the period can then be divided by the inventory turnover formula to calculate the
days it takes to sell the inventory on hand or "inventory turnover days."
This ratio should be compared against industry averages. A low turnover implies poor sales
and, therefore, excess inventory. A high ratio implies either strong sales or ineffective
buying.
High inventory levels are unhealthy because they represent an investment with a rate of
return of zero. It also opens the company up to trouble should prices begin to fal

6) Debt Ratio
A financial ratio that measures the extent of a companys or consumers leverage. The debt
ratio is defined as the ratio of total debt to total assets, expressed in percentage, and can be
interpreted as the proportion of a companys assets that are financed by debt.

The higher this ratio, the more leveraged the company and the greater its financial risk. Debt
ratios vary widely across industries, with capital-intensive businesses such as utilities and
pipelines having much higher debt ratios than other industries like technology. In the
consumer lending and mortgage businesses, debt ratio is defined as the ratio of total debt
service obligations to gross annual income.
7) Debt Equity Ratio
A measure of a company's financial leverage calculated by dividing its total liabilities by
stockholders' equity. It indicates what proportion of equity and debt the company is using to
finance its assets.

A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
8) Equity Multiplier
The ratio of a companys total assets to its stockholders equity. The equity multiplier is a
measurement of a companys financial leverage. Companies finance the purchase of assets
either through equity or debt, so a high equity multiplier indicates that a larger portion of
asset financing is being done through debt. The multiplier is a variation of the debt ratio.
9) Net Profit Ratio
A ratio of profitability calculated as net income divided by revenues, or net profits
divided by sales. It measures how much out of every dollar of sales a company actually
keeps in earnings.
Increased earnings are good, but an increase does not mean that the profit margin of a
company is improving. For instance, if a company has costs that have increased at a
greater rate than sales, it leads to a lower profit margin. This is an indication that costs
need to be under better control.

10) Days Inventory

A financial measure of a company's performance that gives investors an idea of how long it
takes a company to turn its inventory (including goods that are work in progress, if
applicable) into sales. Generally, the lower (shorter) the DSI the better, but it is important to
note that the average DSI varies from one industry to another.
Here is how the DSI is calculated:

Also known as days inventory outstanding (DIO).

This measure is one part of the cash conversion cycle, which represents the process of
turning raw materials into cash. The days sales of inventory is the first stage in that process.
The other two stages are days sales outstanding and days payable outstanding. The first
measures how long it takes a company to receive payment on accounts receivable, while the
second measures how long it takes a company to pay off its accounts payable.