Essential CFA Financial Ratios

Master key financial ratios required for the CFA exam, including formulas and interpretations for liquidity, leverage, and profitability analysis.

What is the current ratio formula?

Front

Current Ratio = Current Assets / Current Liabilities

Back

What does the quick ratio measure?

Front

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

Back

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

Front

ROE = Net Income / Shareholder's Equity

Back

What does the interest coverage ratio indicate?

Front

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

Back

How is the debt-to-equity ratio calculated?

Front

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

Back