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Ratios Made SimpleA beginner's guide to the key financial ratiosby Robert Leach
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Jacket text
An effective method of understanding company accounts is the use of the ratio. This usually involves taking one figure from the published accounts and dividing it by another, though some ratios use other mathematical procedures.
'Ratios Made Simple' looks at ratios from the perspective of an investor. Ratios are given in nine chapters, where each chapter looks at a different aspect that may concern an investor. These include return, profitability and volatility. Where a ratio has some significant variations, these are also noted.
For each ratio the text provides a definition, understanding the ratio, and investor's use of the ratio. Investors are 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.
Contents
About the Author
Introduction
1. Proï¬tability Ratios
1.1. Earnings per Share (EPS)
1.2. Price-to-Earnings Ratio (P/E)
1.3. Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization Ratio (EV/EBITDA)
1.4. Price-to-Sales Ratio (PSR)
2. Investment Ratios
2.1. Dividend Yield
2.2. Total Return
2.3. Return On Capital Employed (ROCE)
2.4. Return On Equity (ROE)
2.5. Premium To Asset Value (PAV)
2.6. Internal Rate Of Return (IRR)
2.7. Return On Assets (ROA)
2.8. Dividend Payout Ratio
3. Dividend Cover
3.1. Dividend Cover
4. Margins
4.1. Gross Margin and Net Margin
4.2. Overheads To Turnover
5. Gearing
5.1. Gearing Ratio
5.2. Interest Cover
6. Solvency Ratios
6.1. Acid Test
6.2. Current Ratio
6.3. Cash Burn
6.4. Defensive Interval
6.5. Fixed Charges Cover
7. Efficiency Ratios
7.1. Stock Turn
7.2. Price-To-Book Value (PBV)
7.3. Overtrading and Undertrading
7.4. Item Comparison
8. Policy Ratios
8.1. Creditor Period
8.2. Debtor Period
8.3. Fixed Asset Spending Ratio
9. Volatility
9.1. Volatility Ratio
9.2. Standard Deviation
Appendix
About the author
| Robert Leach FCCA ACA is a chartered accountant, lecturer and author of more than 40 books, mainly on financial topics. His books include The Investor's Guide to Understanding Accounts. For two years he was a judge of the Stock Exchange Awards for best published accounts. He has also written encyclopaedias on tax and payroll, and written for many magazines and newsletters, and for anyone who will pay him. |  |
More about Robert Leach
Other books by Robert Leach
 | Accounts Made Simple A beginner's guide to company accounts |
 | The Investor's Guide to Understanding Accounts 10 crunch questions to ask before investing in a company |
Contact the author
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