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Financial ratios

interest coverage ratio

Interest Coverage Ratio: A Key Financial Metric

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About 46% of corporate bankruptcies happen because companies can’t manage debt payments. They looked profitable on paper. This shows why the interest coverage ratio matters in real finance. I discovered this metric years ago while reviewing company financials. It’s not flashy like revenue or profit margins. But it reveals something crucial: can a company afford its debt interest? The interest coverage ratio measures how many times a company covers interest payments. It uses operating earnings for this calculation. Think of… Read More »Interest Coverage Ratio: A Key Financial Metric

return on assets

Understanding Return on Assets (ROA)

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A tiny 0.03% difference in Return on Assets (ROA) can greatly affect a company’s finances. The First of Long Island Corporation’s ROA was 0.44% for nine months ending September 30, 2025. Their adjusted ROA was 0.47%1. This small gap shows how crucial ROA is for assessing a company’s success. ROA is a key ratio measuring how well a company uses its assets to make money. It’s a vital tool for analyzing financial performance. ROA shows how efficiently a company manages… Read More »Understanding Return on Assets (ROA)

quick ratio

Quick Ratio: Measure Your Company’s Liquidity Fast

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Do you know if your company has a quick ratio of 1 or more? It means it can pay off short-term debts with its liquid assets1. The quick ratio, or acid-test ratio, is key for checking your company’s liquidity fast. It doesn’t require selling inventory or getting new loans. This measure quickly shows if your firm can handle its current debts with assets like cash and accounts receivable. Investopedia says checking your company’s liquidity is simple with this ratio. It’s… Read More »Quick Ratio: Measure Your Company’s Liquidity Fast