Ratios Made Simple: A beginner’s guide to the key financial ratios
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Ratios provide an extremely effective method of understanding company accounts. At their most basic this usually involves taking one figure from the published accounts and dividing it by another – however, this seemingly simple process can reveal an enormous amount about both the nature and performance of a company.
Ratios Made Simple looks at ratios from the perspective of an investor, providing a toolkit for investors to use to accurately analyse a company from its accounts. This book is divided into nine chapters, with each chapter looking at a different aspect of potential concern to an investor:
1. Profitability Ratios
2. Investment Ratios
3. Dividend Cover
4. Margins
5. Gearing
6. Solvency Ratios
7. Efficiency Ratios
8. Policy Ratios
9. Volatility
For each ratio, financial expert Robert Leach provides a detailed definition, explains how it works, describes its use. Investors are also given a simple explanation of how to calculate each ratio, what the ratio means and how the investor should apply the answers in making investment decisions.
This book provides the investor with an essential guide to the use of these powerful analytical tools – tools that should form a vital part of an investor's decision-making process.