Essential CFA Financial Ratios

What is the current ratio formula?

Current Ratio = Current Assets / Current Liabilities

What does the quick ratio measure?

The quick ratio measures a company's ability to meet short-term obligations with its most liquid assets.

What is the formula for Return on Equity (ROE)?

ROE = Net Income / Shareholder's Equity

What does the interest coverage ratio indicate?

It indicates how easily a company can pay interest on its outstanding debt.

How is the debt-to-equity ratio calculated?

Debt-to-Equity Ratio = Total Debt / Total Equity