The exclusion ratio is a financial ratio that is used to measure the profitability of a company. It is calculated by dividing the net income of the company by the number of shares outstanding. The higher the ratio, the more profitable the company is. What is another term for pure life annuity? A pure life … Read more
The forward price-to-earnings (forward P/E) ratio is a valuation metric for determining the relative attractiveness of a stock. The forward P/E ratio is calculated using a company’s current share price and its earnings forecast for the next 12 months. The forward P/E ratio is often used by investors as a way to compare different stocks. … Read more
Operating leverage is a ratio that measures the percentage change in operating income to the percentage change in sales. The higher the operating leverage, the more sensitive operating income is to changes in sales. There are two types of operating leverage: financial leverage and operating leverage. Financial leverage is the use of debt to finance … Read more
An exchange ratio is the number of shares of one company’s stock that can be exchanged for another company’s stock. Exchange ratios are used to determine the value of a company’s stock and to help set the price of a stock when it is first offered to the public. What is a collar in M&A? … Read more
The shareholder equity ratio is a key financial ratio that measures the relationship between a company’s shareholder equity and its total assets. This ratio is also sometimes referred to as the equity to assets ratio. The shareholder equity ratio can be a useful tool for investors and analysts when trying to assess the financial health … Read more
Capitalization ratios are financial ratios that are used to measure a company’s capital structure. The three most common capitalization ratios are the debt-to-equity ratio, the debt-to-assets ratio, and the equity-to-assets ratio. The debt-to-equity ratio measures the ratio of a company’s debt to its equity. This ratio is used to determine the financial risk of a … Read more
The equity multiplier (also known as the debt-equity ratio or the financial leverage ratio) is a financial ratio that measures the amount of debt financing a company has in relation to its equity financing. The equity multiplier can be used to assess the financial risk of a company, as well as the potential return on … Read more
The Interest Coverage Ratio: How It Works with an Example How is times interest earned ratio calculated in financial statements? The times interest earned ratio (TIE) is a financial ratio that measures a company’s ability to make interest payments on its outstanding debt. The TIE ratio is calculated by dividing a company’s earnings before interest … Read more
Price to Tangible Book Value (PTBV) is a ratio that measures the market value of a company’s equity relative to the book value of its assets. The ratio is calculated by dividing the market value of a company’s equity by the book value of its assets. The PTBV ratio is used to assess whether a … Read more
The earnings multiplier is a financial ratio that measures the relationship between a company’s earnings and its stock price. The ratio is calculated by dividing a company’s earnings per share (EPS) by its price-earnings ratio (P/E). The earnings multiplier can be used to compare companies within the same industry or sector. It can also be … Read more
