The price-earnings ratio is the second major valuation ratio profiled in Axel Tracy's book, Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyse Any Business on the Planet.

For income investors, it is important to know what proportion of a company's earnings are being distributed as dividends. That can be found using the payout ratio, as Axel Tracy explains in "Ratio ...

Financial ratios are calculations developed using data from a company's financial statements. Managers, investors and lenders analyze financial ratios for indications of a company's performance and ...

Financial statement analysis is useful in anticipation of future conditions and planning for actions that will improve the firm's future performance. Financial ratios are designed to help you evaluate ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Amy is an ACA and the CEO and founder of ...

Ratio analysis assesses company performance using financial ratios. ITW improved profit margins and FCF through strategic alignment. ITW's stock outperformed S&P 500 over a decade, showing strategic ...