O'Reilly logo

The Financial Times Guide to Using the Financial Pages, 6th Edition by Mr. Romesh Vaitilingam

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

18

Company and investor lives: the key performance ratios

by Ken Langdon*

“I am a better investor because I am a businessman, and a better businessman because I am an investor.”

Warren Buffett

“Because there is so much noise in the world, people adopt rules of thumb.”

Fischer Black

  • Seven ratios – four financial ratios and three shareholder ratios – can help investors to evaluate the performance of a company.
  • Gearing compares the amount of money in shareholders’ funds with the company’s liabilities. The higher the ratio, the more likely that its liabilities will become a burden and dividends will be reduced.
  • Income gearing – the ratio of interest payable to the profits out of which interest is paid – gives an indication of the company’s ability ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required