Financial Ratios

Pretax Profit margin formula

Pretax Profit margin

What is the Pretax Profit margin ratio? Pretax Profit margin or Profit before Tax margin is a profitability ratio that helps in understanding the company performance for a given period. Unlike Gross Profit margin ratio, that considers only Direct expenses or Cost of Sales, this ratio is arrived after considering all expenses except Taxes. Pretax Profit Margin Meaning …

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Cash Ratio Formula

Cash ratio

What is Cash ratio? The cash ratio or cash coverage ratio is an important liquidity ratio which is closely related to Quick Ratio and Current Ratio. Analyzing cash ratio helps in identifying the liquidity position of the company purely in terms of cash and cash equivalents. Cash ratio Meaning Cash Ratio tries to build a …

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Current ratio formula

Current ratio

What is Current ratio? Understanding the current ratio formula is an important element of liquidity ratio analysis.  Liquidity ratios help us in understanding if the companies are in a better position to meet their short-term obligations. One of the most widely used and important liquidity ratio is the Current Ratio. Not only the ratio is …

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