1.Return on Investment is also known as Return on Assets and Rate Earned on Total Assets. It is defined as (Return on Investment = Net Profit / Total Assets). It measures the earning power of the company's assets and thus the effectiveness of its management.

2.Return on Sales is also known as Profit Margin. It is defineds as (Return on Sales = Net Profit After Taxes / Net Sales). It measures the profit per dollar of sales. The higher this ratio the better able the firm is able to weather adverse business condition such as falling prices and rising costs.

3.Return on Equity also known as Rate Earned on Stockholders Equity and Return on Net Worth. It is defined as (Return on Equity = Net Profit / Equity). This ratio is as close as one can get on the true performance of a business.

4.Return on Invested Capital is defined as (Return on Invested Capital = Net Profit After Taxes/Long Term Debt + Equity).

5.Accounts Payable to Sales is defined as (Accounts Payable to Sales = Accounts Payable / Net Sales). This ratio measures payments to suppliers. Lower is better than higher inasmuch as a firm does a good job of managng its payables.

6.Debt to Equity is defined as (Debt to Equity = Total Liabilities / Equity) also known as Debt to Net Worth. It measures the amount of long term protection available to creditors, stockholders or any other entity able to assess a claim against a firm. When this ratio moves beyond 3:1, the firm is highly leveraged.

7.Current Debt to Equity it defined as (Current Debt to Equity = Current Liabilities / Equity). It measures the amount of immediate protection available to creditors, stockholders or any other entity able to assess a claim against a company. A ratio over 1 could signal serious trouble for most industries.

8.Interest Coverage is also known as Times-Interest-Earned Ratio and is defined as (Interest Coverage = Pretax Income + Interest Expense / Interest Expense). This ratio calculates the number of times a firms interest is covered by earnings. It is best if this this ratio is over 3.

9.Debt Services is defined as (Debt Services = Pretax Income + Interest Expense + Depreciation / Interest Expense + Principle Due in Next Year). It measures to what extent debt services are covered. A ration in the neighborhood of 2 is acceptable. Highger than 2 is better than lower.