,FornyournconveniencenApressnhasnplacednsomenofnthenfrontn
matternmaterialnafternthenindex.nPleasenusenthenBookmarksn
andnContentsnatnanGlancenlinksntonaccessnthem.
,Contents
Aboutn thenAuthors .................................................................... vii
Acknowledgments .................................................................... ix
Preface .................................................................................. xi
Chaptern 1: Ratiosn Overview ...................................................... 1
Chaptern 2: Ratiosn Description .................................................... 7
Chaptern 3: ABC n Company...................................................... 107
Chaptern 4: CapitalnAllocation .................................................. 115
AppendixnA:n Abbreviations ....................................................... 125
Appendixn B:n UsefulnWebsites .................................................... 127
Index .................................................................................. 129
, CHAPTERn
1
Ratios Overview n
Thenratiosninnthisnbooknarentools.nTheynarenprimarilyntoolsnfornturningnthend
atancontainedninnfinancialnstatementsnintoninformationnusednbynmanagersnandnex
ecutivesntonbetternunderstandnwhatnisnhappeningninnancompany.nLikenallntools,ntheyn
cannbenusednfornthingsnothernthanntheirnoriginalndesign,nsuchnasnevaluatingnannac
quisition,ncreatingnpro-
formanstatementsnrelatedntonpotentialncoursesnofnaction,nornfiguringnoutnwhic
hnstockntonbuy.
Financialnratiosncanntypicallynbengroupednintononenofnthenfollowingnrationtypes:
• Marketnvaluenratios
• Liquidityn ratios
• Performancenratios
• Cashnflownratios
• Profitabilitynratios
• Debtnratios
Therenarenansmallnnumbernofnratiosnthatndonnotnfitnintonanynofnthesencategories.nH
owever,nwenhavenincludednthemnasnwenhavenfoundnthemnverynusefulnourselvesnan
dnbelieventhatntheynmakenfornanmorencompletenbook.
matternmaterialnafternthenindex.nPleasenusenthenBookmarksn
andnContentsnatnanGlancenlinksntonaccessnthem.
,Contents
Aboutn thenAuthors .................................................................... vii
Acknowledgments .................................................................... ix
Preface .................................................................................. xi
Chaptern 1: Ratiosn Overview ...................................................... 1
Chaptern 2: Ratiosn Description .................................................... 7
Chaptern 3: ABC n Company...................................................... 107
Chaptern 4: CapitalnAllocation .................................................. 115
AppendixnA:n Abbreviations ....................................................... 125
Appendixn B:n UsefulnWebsites .................................................... 127
Index .................................................................................. 129
, CHAPTERn
1
Ratios Overview n
Thenratiosninnthisnbooknarentools.nTheynarenprimarilyntoolsnfornturningnthend
atancontainedninnfinancialnstatementsnintoninformationnusednbynmanagersnandnex
ecutivesntonbetternunderstandnwhatnisnhappeningninnancompany.nLikenallntools,ntheyn
cannbenusednfornthingsnothernthanntheirnoriginalndesign,nsuchnasnevaluatingnannac
quisition,ncreatingnpro-
formanstatementsnrelatedntonpotentialncoursesnofnaction,nornfiguringnoutnwhic
hnstockntonbuy.
Financialnratiosncanntypicallynbengroupednintononenofnthenfollowingnrationtypes:
• Marketnvaluenratios
• Liquidityn ratios
• Performancenratios
• Cashnflownratios
• Profitabilitynratios
• Debtnratios
Therenarenansmallnnumbernofnratiosnthatndonnotnfitnintonanynofnthesencategories.nH
owever,nwenhavenincludednthemnasnwenhavenfoundnthemnverynusefulnourselvesnan
dnbelieventhatntheynmakenfornanmorencompletenbook.
