Key Ratio
Categories: Metrics
How many keys did you get per car? Only two? Well, if it's a 4-door car then, it's a key ratio of 50%, right? Well, yeah. But this is something totally different.
A key ratio isn't just one ratio. Lots of key elements exist in assessing the financial health of a company. Think about it like The Academy Awards, only for financial ratios. "In the category of key balance sheet ratio, the nominees are..." And then you have the Current Ratio (a.k.a. The Acid Test), the Quick Ratio, the Debt to Equity Ratio, and so on.
If we move on to later in the evening, we'll find the nominees for best key ratio in an income statement. Things like...earnings per share, return on sales, gross margin, operating margin, dividend payout ratio.
And there are other key ratios. Cash flow margins. Turnover ratio (of the company's stock that trades publicly). And a bunch of others.
Our vote for winner: The Shmoop Ratio. (But we're not totally sure what that is...yet.)