# What are investment ratios?

Contents

## What are examples of investment ratios?

Common examples of ratios include the price-to-earnings (P/E) ratio, net profit margin, and debt-to-equity (D/E).

## What is investment ratio?

The investment income ratio is the ratio of an insurance company’s net investment income to its earned premiums. The investment income ratio compares the income that an insurance company brings in from its investment activities rather than its operations.

## What is a good ratio for investing?

RETURN ON EQUITY

A figure is always better. The ratio highlights the capability of the management. ROE is net income divided by shareholder equity. “ROE of 15-20% is generally considered good, though high-growth companies should have a higher ROE.

## What are the 5 major categories of ratios?

Ratio analysis consists of calculating financial performance using five basic types of ratios: profitability, liquidity, activity, debt, and market.

## What are the 4 financial ratios?

In general, financial ratios can be broken down into four main categories—1) profitability or return on investment; 2) liquidity; 3) leverage, and 4) operating or efficiency—with several specific ratio calculations prescribed within each.

## What is the investment formula?

Investment problems usually involve simple annual interest (as opposed to compounded interest), using the interest formula I = Prt, where I stands for the interest on the original investment, P stands for the amount of the original investment (called the “principal”), r is the interest rate (expressed in decimal form), …

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## What numbers should you look at when buying stocks?

Here are seven things an investor should consider when picking stocks:

• Trends in earnings growth.
• Company strength relative to its peers.
• Debt-to-equity ratio in line with industry norms.
• Price-earnings ratio can help provide market value.
• How is a company treating its dividends? 