The Current Ratio is a very important measure because it’s an indicator of a company’s ability to meet its financial obligations. What exactly is the Current Ratio? It’s a number that is derived by dividing current assets by current liabilities. A current asset is any asset on the balance sheet that’s expected to be realized, […]
Debt-to-Equity Ratio
The Debt-to-Equity ratio is a measure of a company’s financial leverage, and is computed by dividing Total Liabilities by Total Equity. The higher the number, the greater the financial leverage. What is financial leverage? Financial leverage has to do with the amount of return on investment that can be generated from a stated amount of […]