financial ratios

What does return on capital employed mean?

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Investors can use various fundamental ratios to evaluate the financial health of a company. One popular ratio they may use is return on capital employed. In this article we discuss what this is and why it is useful. Definition The return on capital employed ratio measures how the well company is using their capital to generate profits. A higher ratio indicates a high return on capital invested. Formula to calculate return on capital employed (ROCE): Why this ratio is useful? …

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Important Financial Ratios

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Each Tuesday we produce a research document called “The Dynamic Investor” where we analyse various stocks fundamentally as well as technically. Each stock which is covered also has 5 fundamental metrics. Whilst there are many other important metrics that investors need to understand, these 5 are a good starting point. In this article we explain what each metric means and why they are important when analysing stocks. Market Cap A market cap (“market capitalisation” in full) of a stock is …

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6 Important Financial Ratios for Investors

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There are a number of financial ratios that investors need to be familiar with in order to assess the financial strength of a company. Understanding these different ratios can help you become a better investor in the share market. These are the top 6 financial ratios that share investors need to be familiar with 1. Price to Earnings Ratio The P/E ratio represents how much stock investors are willing to pay for each dollar of earnings. The formula is: Current …

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