- Financial Ratio Analysis
- By Yuriy Smirnov Ph.D.
- February 9, 2018

The asset turnover ratio refers to the group of efficiency ratios gauging the ability of a company to generate sales using its assets. In other words, it shows how much in total dollars of sales ...

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- By Yuriy Smirnov Ph.D.
- January 11, 2017

Times interest earned ratio (TIE), which is also known as interest coverage ratio, measures the ability of a company to meet interest expense on its debts outstanding using its available earnings ...

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- By Yuriy Smirnov Ph.D.
- December 20, 2016

Equity multiplier ratio, which is also known as financial leverage ratio, measures a proportion of the total assets of a company financed by its shareholders. It is usually used as an indicator of credit risk and as one of the key components of DuPont analysis ...

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- By Yuriy Smirnov Ph.D.
- November 11, 2016

DuPont analysis is a model widely used in financial ratio analysis to designate the ability of a company to increase its return on equity ratio (ROE). The model breaks down ROE ratio into three components: profit margin, asset turnover, and financial leverage ...

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- By Yuriy Smirnov Ph.D.
- October 19, 2016

Profit margin ratio, also known as net profit margin, is a financial ratio measuring the percentage of net income in net sales of a company. This metric is mostly used to compare different companies in the same industry ...

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- By Yuriy Smirnov Ph.D.
- October 19, 2016

Return on equity or ROE is a financial ratio measuring the percentage of net income attributable to shareholders. From one side, it shows the profitability of shareholdersâ€™ investments, and from the other side it shows the efficiency of management in using equity financing ...

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- By Yuriy Smirnov Ph.D.
- October 19, 2016

Days of sales outstanding (DSO) is a ratio that measures the number of days it takes for a company to collect cash from its credit sales. It is also used as an important liquidity measurement because the lower it is, the higher the liquidity of a business ...

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- By Yuriy Smirnov Ph.D.
- October 19, 2016

Current ratio refers to a liquidity ratio that measures the ability of a business to meet its short-term obligations. The current ratio shows the number of times current assets cover current liabilities of a business. In other words, it reflects the ability of a business to convert ...

read more- Bond Valuation
- By Yuriy Smirnov Ph.D.
- October 9, 2016

Current yield (CY) is the expected rate of return based on an annual coupon payment and current market price of a bond. Thus, it does not account for all cash flows if an investor holds a bond until the maturity date. In other words, current yield represents the expected return if ...

read more- Bond Valuation
- By Yuriy Smirnov Ph.D.
- October 9, 2016

A callable bond is a simple financial instrument that can be redeemed by the issuer before the maturity date. The call price is usually higher than the par value, but the call price decreases as it approaches the maturity date ...

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- By Yuriy Smirnov Ph.D.
- October 9, 2016

The yield to maturity (YTM) of a bond is the internal rate of return (IRR) if the bond is held until the maturity date. In other words, YTM can be defined as the discount rate at which the present value of all coupon payments and face value is equal to the current market price of a bond ...

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