The Complete Guide to Financial Ratios eBook

We just posted a preview of our upcoming ebook: The Complete Guide to Financial Ratios.

Financial Analysis eBook: The Complete Guide to Financial Ratios

Our upcoming 100+ page financial analysis eBook.

This eBook goes through nearly 70 financial ratios, explaining what they are, how they are important, and show an example of calculating each one.  The finished guidebook will be well over 100 pages, as we are adding a special bonus section: explanations of all the financial terms we used while writing the financial ratio section.

Until we are finished with the full version, you can get the preview eBook in PDF format by visiting the eBook pageand signing up to the mailing list.  We will email you the preview, plus let you know when the full eBook is finished.

Sample page describing the Price to Earnings ratio from the preview ebook

Sample page from the eBook

We tried to pack as much information as we could about each financial ratio, while keeping the eBook easy to read.  The 5-page preview is very close to what the full version will look like.

Each ratio will have a definition, show the ratio and what financial values are used, explain why the ratio is important, and have a sample calculation showing which financial values are used and how the ratio is calculated.  We then give a brief summary of the ratio results.  This will be a great resource for finance professionals, students, or anyone wanting a quick reference guide on financial ratios.   The five ratios contained in the eBook preview are:

  1. Price to Earnings Ratio
  2. Quick Ratio
  3. Retained Earnings to Stockholders Equity
  4. Retained Earnings to Total Assets
  5. Return on Equity

We are eager to hear what you have to say about The Complete Guide to Financial Ratios preview, so get the preview and let us know what you think.

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How to Calculate Profitability

We just completed a series of articles about how to calculate profitability.  We explain what profitability is, why it is important, and how to measure company profitability.  We then go through an example using two companies, the data is from two competing companies and is actual data, but the names of the companies are changed.

We finalize the series by reviewing the Borders Group Inc, a bookseller that competed with Barnes and Noble and Amazon.com before going bankrupt in early 2011.

  1. How to Measure Profitability, Part 1 – An explanation of profitability.
  2. How to Measure Profitability, Part 2 – Defining profitability ratios.
  3. (coming soon) How to Measure Profitability, Part 3 – comparing profitability of two companies.
  4. How to Measure Profitability, Part 4 – Border Group Inc profitability just before bankruptcy.
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Financial Glossary and Calculators Updated

We just finished updating our financial glossaryAn updated version of our Financial Glossary and Calculator sections of our website. Check it out!and financial ratio calculators sections of our website.  We added an alphabet button box to the financial terms section, so you can easily see all financial terms that start with the letter S.  Each term is now tagged, so you can see all financial terms used on the income statement, for example.

These changes should help navigate though the dozens of terms, definitions, and calculators we have added, plus the many more to come.  We have many more useful changes and additions coming very soon, and will post the news here!

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Measuring Liquidity

We just posted part one of a series of three articles about measuring liquidity. In this first part, we explain what liquidity is and why it is important. Part two will follow shortly, discussing and explaining the various financial ratios used in liquidity analysis, followed by part three where we go through a brief example using actual company data and the liquidity ratios we discussed to arrive at a conclusion.

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New Online Financial Ratio Calculators

The TI-85 scientific graphing calculator

The Texas Instruments TI-85 graphing calculator.

In its day (mid-1990′s), the TI-85 was the premier graphing calculator.  It was too large to fit in your pocket, surprisingly heavy, and came in any color you like, as long it was black. Fortunately, its calculator features made up for what it lacked in aesthetics.

Those days are long gone, and we hopefully have made things a little easier by posting our new ratio calculators section on our website.  We had financial ratio explanations and financial statement terms on our website for quite some time, but thought it would help to also have small calculator examples to see the ratios in action.  These are all of the ratios Value Investor Professional uses, and it’s meant to be a quick and easy way to learn about individual financial ratios, plus try a few out by entering sample data and getting comfortable with the results. We also explain the results of each ratio, detailing how to interpret positive and negative results.

A ratio calculator example: Net Worth per Share

Sample online financial ratio calculator

We already have quite a few people checking out the calculators section.  Here are the top 5 most-visited financial calculators:

  1. Financial leverage index
  2. Earnings Per Share
  3. Fixed Asset Turnover
  4. Cash Flow Margin
  5. Times Interest Earned

Or just view them all

Let us know if you find the ratio calculators useful, and how we can improve them.
Calculator photo used under Creative Commons by Sandman
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