Financial ratios are indispensable tools for investors, analysts, and business owners to evaluate a company’s performance, financial health, and market valuation. In this post, we dive into 50 practical financial ratios (excluding the current ratio) that offer actionable insights into various aspects of a company’s operations. These ratios are organized into key categories: liquidity, profitability, solvency, efficiency, market valuation, growth, and other specialized metrics. Each category and ratio includes its Chinese name for bilingual accessibility.
For every ratio, you’ll find:
- A practical interpretation explaining what it measures and why it matters.
- A worked example based on realistic financial data from Apple Inc. (2023 fiscal year).
Apple’s financial statements are included at the end of this post for transparency. Whether you’re an investor looking to refine your analysis or a student learning financial metrics, this guide is designed to be your go-to resource.
Table of Contents
- Liquidity Ratios (流动性比率)
- Profitability Ratios (盈利能力比率)
- Solvency Ratios (偿债能力比率)
- Efficiency Ratios (效率比率)
- Market Valuation Ratios (市场估值比率)
- Growth Ratios (增长比率)
- Other Ratios (其他比率)
- Apple Inc. Financial Data (2023)
Liquidity Ratios (流动性比率)
Liquidity ratios assess a company’s ability to meet short-term obligations, offering insight into financial stability and cash flow management.
1. Quick Ratio (速动比率)
- Formula: (Current Assets – Inventory) / Current Liabilities
- Interpretation: Measures a company’s capacity to pay short-term liabilities without selling inventory. A ratio above 1 signals strong liquidity.
- Example: Apple 2023:
Current Assets = $143.7B, Inventory = $6.6B, Current Liabilities = $145.3B
Quick Ratio = ($143.7B – $6.6B) / $145.3B = 0.94
Apple’s quick ratio of 0.94 indicates it’s slightly below the ideal threshold, suggesting a reliance on other cash sources.
2. Cash Ratio (现金比率)
- Formula: Cash and Cash Equivalents / Current Liabilities
- Interpretation: Shows how much of a company’s short-term liabilities can be covered by cash alone. Higher values indicate better immediate liquidity.
- Example: Apple 2023:
Cash and Cash Equivalents = $29.9B, Current Liabilities = $145.3B
Cash Ratio = $29.9B / $145.3B = 0.21
Apple can cover 21% of its liabilities with cash, a conservative but stable position.
3. Operating Cash Flow Ratio (经营现金流量比率)
- Formula: Operating Cash Flow / Current Liabilities
- Interpretation: Indicates how well cash from operations covers short-term liabilities. A ratio above 1 is optimal.
- Example: Apple 2023:
Operating Cash Flow = $113.1B, Current Liabilities = $145.3B
Operating Cash Flow Ratio = $113.1B / $145.3B = 0.78
Apple’s ratio of 0.78 shows solid cash flow, though it doesn’t fully cover liabilities.
4. Net Working Capital Ratio (净营运资本比率)
- Formula: (Current Assets – Current Liabilities) / Total Assets
- Interpretation: Measures working capital efficiency relative to total assets. A positive value reflects good liquidity.
- Example: Apple 2023:
Current Assets = $143.7B, Current Liabilities = $145.3B, Total Assets = $352.6B
Net Working Capital = $143.7B – $145.3B = -$1.6B
Net Working Capital Ratio = -$1.6B / $352.6B = -0.0045
Apple’s slightly negative ratio suggests tight liquidity management.
5. Defensive Interval Ratio (防御间隔比率)
- Formula: (Cash + Marketable Securities + Receivables) / Daily Operating Expenses
- Interpretation: Estimates how many days a company can operate using liquid assets without new income. Higher values indicate resilience.
- Example: Apple 2023:
Cash = $29.9B, Marketable Securities = $31.6B, Receivables = $60.9B, Operating Expenses = $268.2B
Daily Operating Expenses = $268.2B / 365 ≈ $0.735B
Defensive Interval Ratio = ($29.9B + $31.6B + $60.9B) / $0.735B ≈ 168 days
Apple can operate for 168 days without additional revenue.
Profitability Ratios (盈利能力比率)
Profitability ratios evaluate a company’s ability to generate earnings, reflecting its operational success and efficiency.
6. Gross Profit Margin (毛利率)
- Formula: Gross Profit / Revenue
- Interpretation: Shows the percentage of revenue remaining after the cost of goods sold (COGS). Higher margins indicate strong pricing power.
- Example: Apple 2023:
Gross Profit = $170.8B, Revenue = $383.3B
Gross Profit Margin = $170.8B / $383.3B = 44.5%
Apple retains 44.5% of revenue post-COGS, a sign of robust profitability.
7. Operating Profit Margin (营业利润率)
- Formula: Operating Income / Revenue
- Interpretation: Measures the percentage of revenue left after operating expenses. It highlights operational efficiency.
- Example: Apple 2023:
Operating Income = $114.3B, Revenue = $383.3B
Operating Profit Margin = $114.3B / $383.3B = 29.8%
Apple’s 29.8% margin reflects effective cost control.
8. Net Profit Margin (净利润率)
- Formula: Net Income / Revenue
- Interpretation: Indicates the percentage of revenue that becomes profit after all expenses. A key profitability metric.
- Example: Apple 2023:
Net Income = $97.0B, Revenue = $383.3B
Net Profit Margin = $97.0B / $383.3B = 25.3%
Apple turns 25.3% of revenue into profit, showcasing financial strength.
9. EBITDA Margin (EBITDA利润率)
- Formula: EBITDA / Revenue
- Interpretation: Measures core profitability before interest, taxes, depreciation, and amortization. Higher margins suggest strong operations.
- Example: Apple 2023:
EBITDA = $129.2B, Revenue = $383.3B
EBITDA Margin = $129.2B / $383.3B = 33.7%
Apple’s 33.7% margin underscores its operational efficiency.
10. Return on Assets (ROA) (资产回报率)
- Formula: Net Income / Total Assets
- Interpretation: Shows how efficiently assets generate profit. A higher ratio means better asset utilization.
- Example: Apple 2023:
Net Income = $97.0B, Total Assets = $352.6B
ROA = $97.0B / $352.6B = 27.5%
Apple earns 27.5 cents per dollar of assets, a strong result.
11. Return on Equity (ROE) (股本回报率)
- Formula: Net Income / Shareholders’ Equity
- Interpretation: Measures the return on shareholders’ investments. Higher ratios indicate effective equity use.
- Example: Apple 2023:
Net Income = $97.0B, Shareholders’ Equity = $62.2B
ROE = $97.0B / $62.2B = 155.9%
Apple’s 155.9% ROE is exceptional, reflecting high returns for investors.
12. Return on Capital Employed (ROCE) (资本使用回报率)
- Formula: Operating Income / (Total Assets – Current Liabilities)
- Interpretation: Assesses returns on capital employed in operations. A higher ratio signals efficiency.
- Example: Apple 2023:
Operating Income = $114.3B, Total Assets = $352.6B, Current Liabilities = $145.3B
Capital Employed = $352.6B – $145.3B = $207.3B
ROCE = $114.3B / $207.3B = 55.1%
Apple’s 55.1% ROCE highlights capital efficiency.
13. Earnings Per Share (EPS) (每股收益)
- Formula: Net Income / Shares Outstanding
- Interpretation: Represents profit per share, a critical metric for investors.
- Example: Apple 2023:
Net Income = $97.0B, Shares Outstanding = 15.6B
EPS = $97.0B / 15.6B = $6.22
Apple’s EPS of $6.22 reflects strong per-share profitability.
14. Operating Cash Flow Margin (经营现金流量利润率)
- Formula: Operating Cash Flow / Revenue
- Interpretation: Shows the percentage of revenue converted into operating cash. Higher values indicate cash efficiency.
- Example: Apple 2023:
Operating Cash Flow = $113.1B, Revenue = $383.3B
Operating Cash Flow Margin = $113.1B / $383.3B = 29.5%
Apple generates 29.5% of revenue as cash from operations.
15. Return on Invested Capital (ROIC) (投资资本回报率)
- Formula: (Net Income – Dividends) / Invested Capital
- Interpretation: Measures returns on invested capital, excluding dividends. A higher ratio is better.
- Example: Apple 2023:
Net Income = $97.0B, Dividends = $15.0B, Invested Capital = $200B
ROIC = ($97.0B – $15.0B) / $200B = 41.0%
Apple’s 41.0% ROIC shows strong capital returns.
Solvency Ratios (偿债能力比率)
Solvency ratios evaluate a company’s ability to meet long-term obligations and manage debt.
16. Debt-to-Equity Ratio (负债权益比)
- Formula: Total Debt / Shareholders’ Equity
- Interpretation: Compares debt to equity financing. A higher ratio indicates greater leverage.
- Example: Apple 2023:
Total Debt = $109.3B, Shareholders’ Equity = $62.2B
Debt-to-Equity Ratio = $109.3B / $62.2B = 1.76
Apple uses $1.76 of debt per $1 of equity, a moderate leverage level.
17. Debt Ratio (负债比率)
- Formula: Total Debt / Total Assets
- Interpretation: Shows the proportion of assets financed by debt. Lower ratios suggest less debt reliance.
- Example: Apple 2023:
Total Debt = $109.3B, Total Assets = $352.6B
Debt Ratio = $109.3B / $352.6B = 0.31
Apple finances 31% of its assets with debt.
18. Equity Ratio (权益比率)
- Formula: Shareholders’ Equity / Total Assets
- Interpretation: Indicates the share of assets funded by equity. Higher ratios reflect financial stability.
- Example: Apple 2023:
Shareholders’ Equity = $62.2B, Total Assets = $352.6B
Equity Ratio = $62.2B / $352.6B = 0.18
Equity funds 18% of Apple’s assets, with liabilities covering the rest.
19. Interest Coverage Ratio (利息保障倍数)
- Formula: EBIT / Interest Expense
- Interpretation: Measures how easily interest payments are covered by earnings. Higher ratios indicate solvency strength.
- Example: Apple 2023:
EBIT = $114.3B, Interest Expense = $3.7B
Interest Coverage Ratio = $114.3B / $3.7B = 30.9
Apple can cover interest 30.9 times, a sign of robust solvency.
20. Debt Service Coverage Ratio (债务偿付比率)
- Formula: Operating Income / Total Debt Service
- Interpretation: Assesses ability to service debt with operating income. A ratio above 1 is favorable.
- Example: Apple 2023:
Operating Income = $114.3B, Total Debt Service = $10.0B
Debt Service Coverage Ratio = $114.3B / $10.0B = 11.43
Apple’s ratio of 11.43 shows strong debt repayment capacity.
21. Times Interest Earned Ratio (利息倍数)
- Formula: EBIT / Interest Expense (same as Interest Coverage Ratio)
- Interpretation: Another term for interest coverage, showing debt payment ease.
- Example: See Interest Coverage Ratio above (30.9).
22. Debt-to-Capital Ratio (负债资本比率)
- Formula: Total Debt / (Total Debt + Shareholders’ Equity)
- Interpretation: Measures debt’s share in the capital structure. Lower ratios indicate less debt reliance.
- Example: Apple 2023:
Total Debt = $109.3B, Shareholders’ Equity = $62.2B
Debt-to-Capital Ratio = $109.3B / ($109.3B + $62.2B) = 0.64
Debt comprises 64% of Apple’s capital structure.
Efficiency Ratios (效率比率)
Efficiency ratios measure how effectively a company uses its assets and manages operations to generate revenue.
23. Inventory Turnover (存货周转率)
- Formula: COGS / Average Inventory
- Interpretation: Indicates how often inventory is sold and replaced. Higher turnover reflects efficiency.
- Example: Apple 2023:
COGS = $212.5B, Average Inventory = $6.0B
Inventory Turnover = $212.5B / $6.0B = 35.4
Apple turns over inventory 35.4 times annually, showing strong efficiency.
24. Accounts Receivable Turnover (应收账款周转率)
- Formula: Revenue / Average Accounts Receivable
- Interpretation: Measures how quickly receivables are collected. Higher turnover means faster cash recovery.
- Example: Apple 2023:
Revenue = $383.3B, Average Accounts Receivable = $30.0B
Accounts Receivable Turnover = $383.3B / $30.0B = 12.8
Apple collects receivables 12.8 times per year.
25. Accounts Payable Turnover (应付账款周转率)
- Formula: Purchases / Average Accounts Payable
- Interpretation: Shows how often a company pays suppliers. Lower turnover suggests longer payment terms.
- Example: Apple 2023:
Purchases ≈ COGS = $212.5B, Average Accounts Payable = $60.0B
Accounts Payable Turnover = $212.5B / $60.0B = 3.54
Apple pays suppliers 3.54 times yearly, leveraging extended terms.
26. Asset Turnover (资产周转率)
- Formula: Revenue / Total Assets
- Interpretation: Measures revenue generation per dollar of assets. Higher ratios indicate better utilization.
- Example: Apple 2023:
Revenue = $383.3B, Total Assets = $352.6B
Asset Turnover = $383.3B / $352.6B = 1.09
Apple generates $1.09 in revenue per $1 of assets.
27. Fixed Asset Turnover (固定资产周转率)
- Formula: Revenue / Net Fixed Assets
- Interpretation: Assesses revenue generation from fixed assets (e.g., equipment). Higher ratios show efficiency.
- Example: Apple 2023:
Revenue = $383.3B, Net Fixed Assets = $43.7B
Fixed Asset Turnover = $383.3B / $43.7B = 8.77
Apple generates $8.77 per $1 of fixed assets.
28. Working Capital Turnover (营运资本周转率)
- Formula: Revenue / Working Capital
- Interpretation: Measures revenue per dollar of working capital. High ratios suggest efficiency, but negative working capital can skew results.
- Example: Apple 2023:
Revenue = $383.3B, Working Capital = -$1.6B
Not meaningful due to negative working capital.
29. Days Sales Outstanding (DSO) (应收账款天数)
- Formula: (Average Accounts Receivable / Revenue) × 365
- Interpretation: Shows average days to collect receivables. Lower DSO indicates faster collections.
- Example: Apple 2023:
DSO = ($30.0B / $383.3B) × 365 ≈ 28.6 days
Apple collects payments in about 29 days.
30. Days Payable Outstanding (DPO) (应付账款天数)
- Formula: (Average Accounts Payable / COGS) × 365
- Interpretation: Measures days to pay suppliers. Higher DPO suggests better cash retention.
- Example: Apple 2023:
DPO = ($60.0B / $212.5B) × 365 ≈ 103 days
Apple takes 103 days to pay suppliers, optimizing cash flow.
31. Cash Conversion Cycle (CCC) (现金转换周期)
- Formula: DSO + DIO – DPO
- Interpretation: Tracks the time to convert investments into cash. A negative cycle is ideal.
- Example: Apple 2023:
DIO = ($6.0B / $212.5B) × 365 ≈ 10.3 days
CCC = 28.6 + 10.3 – 103 ≈ -64.1 days
Apple’s negative CCC means it collects cash before paying suppliers.
32. Capital Expenditure Ratio (资本支出比率)
- Formula: Capital Expenditures / Revenue
- Interpretation: Shows the percentage of revenue spent on capital investments. Lower ratios indicate less capital intensity.
- Example: Apple 2023:
CapEx = $10.0B, Revenue = $383.3B
CapEx Ratio = $10.0B / $383.3B = 2.6%
Apple invests 2.6% of revenue in CapEx.
Market Valuation Ratios (市场估值比率)
Market valuation ratios assess a company’s market value relative to its financial performance, aiding investment decisions.
33. Price-to-Earnings Ratio (P/E) (市盈率)
- Formula: Market Price per Share / EPS
- Interpretation: Shows how much investors pay per dollar of earnings. Higher P/E suggests growth expectations.
- Example: Apple 2023:
Market Price = $170, EPS = $6.22
P/E = $170 / $6.22 ≈ 27.3
Investors pay $27.3 per $1 of Apple’s earnings.
34. Price-to-Book Ratio (P/B) (市净率)
- Formula: Market Price per Share / Book Value per Share
- Interpretation: Compares market value to book value. A ratio above 1 indicates market optimism.
- Example: Apple 2023:
Book Value per Share = $62.2B / 15.6B = $3.99, Market Price = $170
P/B = $170 / $3.99 ≈ 42.6
Apple’s high P/B reflects strong market confidence.
35. Dividend Yield (股息收益率)
- Formula: Annual Dividends per Share / Market Price per Share
- Interpretation: Measures dividend return on investment. Higher yields appeal to income investors.
- Example: Apple 2023:
Dividends per Share = $0.94, Market Price = $170
Dividend Yield = $0.94 / $170 ≈ 0.55%
Apple’s 0.55% yield is modest but steady.
36. Enterprise Value to EBITDA Ratio (EV/EBITDA) (企业价值/EBITDA比率)
- Formula: Enterprise Value / EBITDA
- Interpretation: Compares total company value to core earnings. Lower ratios suggest better value.
- Example: Apple 2023:
Enterprise Value = $2,700B, EBITDA = $129.2B
EV/EBITDA = $2,700B / $129.2B ≈ 20.9
Apple’s 20.9 ratio reflects its premium valuation.
37. Price-to-Sales Ratio (P/S) (市销率)
- Formula: Market Price per Share / Revenue per Share
- Interpretation: Compares stock price to revenue per share. Useful for unprofitable companies.
- Example: Apple 2023:
Revenue per Share = $383.3B / 15.6B = $24.57, Market Price = $170
P/S = $170 / $24.57 ≈ 6.92
Investors pay $6.92 per $1 of Apple’s sales.
38. PEG Ratio (市盈增长率)
- Formula: P/E Ratio / Annual EPS Growth Rate
- Interpretation: Adjusts P/E for growth. A PEG below 1 suggests undervaluation.
- Example: Apple 2023:
P/E = 27.3, EPS Growth Rate = 5%
PEG = 27.3 / 5 = 5.46
Apple’s high PEG may indicate overvaluation relative to growth.
39. Dividend Payout Ratio (股息支付率)
- Formula: Dividends per Share / EPS
- Interpretation: Shows the share of earnings paid as dividends. Lower ratios suggest reinvestment.
- Example: Apple 2023:
Dividends per Share = $0.94, EPS = $6.22
Dividend Payout Ratio = $0.94 / $6.22 ≈ 15.1%
Apple pays out 15.1% of earnings as dividends.
40. EV/Sales Ratio (企业价值/销售收入比率)
- Formula: Enterprise Value / Revenue
- Interpretation: Compares total value to revenue. Useful for broader valuation analysis.
- Example: Apple 2023:
Enterprise Value = $2,700B, Revenue = $383.3B
EV/Sales = $2,700B / $383.3B ≈ 7.04
Apple’s 7.04 ratio reflects its strong market position.
41. EV/EBIT Ratio (企业价值/EBIT比率)
- Formula: Enterprise Value / EBIT
- Interpretation: Compares total value to operating earnings. Lower ratios indicate value.
- Example: Apple 2023:
Enterprise Value = $2,700B, EBIT = $114.3B
EV/EBIT = $2,700B / $114.3B ≈ 23.6
Apple’s 23.6 ratio suggests a premium price.
Growth Ratios (增长比率)
Growth ratios measure increases in key financial metrics over time, indicating expansion potential.
42. Revenue Growth Rate (收入增长率)
- Formula: (Current Revenue – Previous Revenue) / Previous Revenue
- Interpretation: Tracks year-over-year revenue growth. Positive growth is favorable.
- Example: Apple 2023:
2023 Revenue = $383.3B, 2022 Revenue = $394.3B
Revenue Growth Rate = ($383.3B – $394.3B) / $394.3B ≈ -2.8%
Apple’s revenue declined 2.8% in 2023.
43. Earnings Growth Rate (收益增长率)
- Formula: (Current EPS – Previous EPS) / Previous EPS
- Interpretation: Measures EPS growth. Consistent increases signal profitability growth.
- Example: Apple 2023:
2023 EPS = $6.22, 2022 EPS = $6.11
Earnings Growth Rate = ($6.22 – $6.11) / $6.11 ≈ 1.8%
Apple’s EPS grew by 1.8%.
44. EBITDA Growth Rate (EBITDA增长率)
- Formula: (Current EBITDA – Previous EBITDA) / Previous EBITDA
- Interpretation: Tracks growth in core earnings. Positive growth is a good sign.
- Example: Apple 2023:
2023 EBITDA = $129.2B, 2022 EBITDA = $130.5B
EBITDA Growth Rate = ($129.2B – $130.5B) / $130.5B ≈ -1.0%
Apple’s EBITDA fell by 1.0%.
45. Free Cash Flow Growth Rate (自由现金流增长率)
- Formula: (Current FCF – Previous FCF) / Previous FCF
- Interpretation: Measures growth in free cash flow, vital for flexibility.
- Example: Apple 2023:
2023 FCF = $99.9B, 2022 FCF = $111.4B
FCF Growth Rate = ($99.9B – $111.4B) / $111.4B ≈ -10.3%
Apple’s FCF dropped by 10.3%.
Other Ratios (其他比率)
These ratios provide specialized insights into financial health, risk, or performance.
46. Altman Z-Score (阿尔特曼Z-Score)
- Formula: Composite score using five ratios to predict bankruptcy risk.
- Interpretation: Above 3 = low risk; below 1.8 = high risk.
- Example: Apple’s strong financials typically yield a high Z-Score (e.g., >3), indicating low bankruptcy risk.
47. Beneish M-Score (贝内什M-Score)
- Formula: Model with eight ratios to detect earnings manipulation.
- Interpretation: Above -2.22 suggests manipulation; below is safer.
- Example: Apple’s M-Score is typically < -2.22, suggesting low manipulation risk.
48. Piotroski F-Score (皮奥特罗斯基F-Score)
- Formula: Score (0-9) based on nine financial criteria.
- Interpretation: Higher scores (e.g., 8-9) indicate financial strength.
- Example: Apple typically scores 8 or 9, reflecting robust health.
49. Price-to-Cash Flow Ratio (市现率)
- Formula: Market Price per Share / Operating Cash Flow per Share
- Interpretation: Compares stock price to cash flow per share. Lower ratios suggest value.
- Example: Apple 2023:
Operating Cash Flow per Share = $113.1B / 15.6B = $7.25, Market Price = $170
Price-to-Cash Flow = $170 / $7.25 ≈ 23.4
Apple’s 23.4 ratio reflects a premium valuation.
50. Same-Store Sales Growth (同店销售增长率)
- Formula: (Current Same-Store Sales – Previous Same-Store Sales) / Previous Same-Store Sales
- Interpretation: Measures growth in existing operations (e.g., retail). Positive growth is ideal.
- Example: Less applicable to Apple, but could track product line growth (data not provided).
Apple Inc. Financial Data (2023)
Here’s the financial data used for the examples (in billions, except per-share amounts):
- Revenue: $383.3B
- Gross Profit: $170.8B
- Operating Income: $114.3B
- Net Income: $97.0B
- EBITDA: $129.2B
- Operating Cash Flow: $113.1B
- Free Cash Flow: $99.9B
- Total Assets: $352.6B
- Current Assets: $143.7B
- Inventory: $6.6B
- Accounts Receivable: $60.9B
- Cash and Cash Equivalents: $29.9B
- Marketable Securities: $31.6B
- Total Liabilities: $290.4B
- Current Liabilities: $145.3B
- Total Debt: $109.3B
- Shareholders’ Equity: $62.2B
- Shares Outstanding: 15.6B
- Market Price per Share: $170
- Dividends per Share: $0.94
- Capital Expenditures: $10.0B
- COGS: $212.5B
- Operating Expenses: $268.2B
- Interest Expense: $3.7B
Conclusion
This guide to 50 practical financial ratios equips you with the tools to analyze a company’s liquidity, profitability, solvency, efficiency, valuation, and growth. By understanding these metrics and applying them to real-world data—like Apple’s—you can make smarter investment decisions. Explore these ratios in your own analysis and unlock deeper financial insights today!
