Chapter 7
Mastering Metrics
IN THIS CHAPTER
Determining whether your company can pay all its bills on time with liquidity metrics
Evaluating how well your company generates and manages profits with profitability metrics
Using debt analytics to measure how effective your company is at managing its debt
Staying debt healthy
This chapter and the next are among the most useful chapters in the book. It's one thing to be able to understand what financial statements are for and how to read them. It’s another thing entirely to be able to pull specific elements from them and create useful ratios that help clarify what's going on inside a corporation. These two chapters contain helpful lists of the most common financial metrics, with details on how to calculate them, and short descriptions on what they mean. Enjoy.
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As with financial statements, the metrics in this chapter are most useful when you compare companies in the same industry. It's also very helpful to compare past results to current ...