Forum Topics Top 3 Analytical Ratios to Assess a Trading Companies Prospects
PortfolioPlus
3 years ago

Mine would be

cash ops per share/share price.

i like this to be less than 7.

Reason: Cash is the main reason for operation + cash trumps puffed up accounting profits 

Net debt/Equity

I like this to be 40% or lower (preferably debt free, of course)

Reason: Cashed up companies don’t go broke and can weather a crisis.

Enterprise Value/EBIT

I like this ro be 8 or less

Reason: This gives me a sighted on relative value.

 

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