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  • Jul 17, 2007, 09:40 AM
    Rennie
    Financial ratio
    If I want to invest in some solid stock in a company which financial ratio would be most helpful... I was thinking Liquidity Ratio but Profitability Ratio looks good to which should I use?
  • Jul 17, 2007, 10:17 AM
    richsaha2007
    Quote:

    Originally Posted by Rennie
    If i want to invest in some solid stock in a company which financial ratio would be most helpful.....I was thinking Liquidity Ratio but Profitability Ratio looks good to which should i use?

    I'm a big fan at the liquidity ratio because it tells you so much about the company.

    1. It tells if a company is able to pay their current debts with only their liquid assets.
    2. Any company that have to cash in their long-term assets just to meet current obligations tells me that the company isn't financially secure.

    I like the Liquidity ratio!

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