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Profitability Ratios: Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of t . . . View Full Definition

Profitability Index: The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.

Profitability: A company's ability to generate revenues in excess of the costs incurred in producing those revenues.

Rate Of Return Ratios: Ratios that measure the profitability of a firm in relation to various measures of investment in the firm.

Ratios Of High-Low Prices To Earnings: High-Low prices as a multiple of earnings per share.

Short-Term Solvency Ratios: Services that assist firms in making short-term investments.

Risk-Adjusted Profitability: A probability used to determine a 'sure' expected value (sometimes called a certainty equivalent) that would be equivalent to the actual risky expected value.

Reserve Ratios: Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a noninterest-bearing account at one of the twelve Federal Reserve Banks.

Market Value Ratios: Ratios that relate the market price of the firm's common stock to selected financial statement items.

Liquidity Ratios: Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities.