Definition: What is Price to Cash Flow (P/CF) Ratio? Price to Cash Flow (P/CF) ratio is the profitability ratio that compares the company’s price to underlying cash flow. This calculation is used to find the worth of the company on the base of cash flow which is generated by the company. This ratio ignores all […]

### Category: Financial Ratios Definitions

## Definition of Quick (Acid Test) Ratio

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 […]

## 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 […]