Definition: What is Quick Ratio (Acid Test)? The Quick Ratio also called the Acid Test Ratio. It is used to measure the ability of the company to pay its current liabilities when they come due with only its quick assets. Quick assets are short term assets or current asset which convert into cash in a […]

### Category: Financial Ratios Definitions

## Definition of Retention Ratio (Plowback Ratio)

Definition: What is Retention Ratio (Plowback Ratio)? The retention ratio is also called the Plowback ratio. It is the financial ratio that measures the earnings amount or profit amount which added to retained earnings at the end of the year. In other words Detention rate withheld by the company and not distributed as a dividend […]

## Definition of Return on Assets (ROA) Ratio

Definition: What is Return on Assets (ROA) Ratio? Return on Assets ratio also called return on total assets. It is the profitability ratio that compares the net income to average total assets to measure the net income produced by total assets during a period. In other words, this ratio is used to find the efficiency […]

## Definition of Average Inventory Period Ratio

Definition: Average inventory period is used to measure the average numbers of days over the given time period, goods are held in inventory before sold. So from this investors and analysts analyze that how long the company takes to sell its current inventory. Average Inventory Period is important in this ratio because it shows how inventory […]

## Definition of Financial Ratio

Definition: Financial ratios are used to analyze the financial standing of the business. Also for the comparison of different companies in different industries financial ratios use. A mathematical comparison of the financial statement, accounts or category is called financial ratio. Through this ratio investors and management knows about the performance of the business. Through this ratio […]