Reference Tool
25 key ratios every stock investor should know — with instant calculators
Benchmark: Generally good: 10–20 for mature companies, higher for growth
Compare what you're paying relative to current earnings.
Calculate →Benchmark: Generally good: <1.0 undervalued, 1.0 fair, >2.0 expensive
Adjust PE for growth — cheaper metric for high-growth stocks.
Calculate →Benchmark: Generally good: <2.0 for most sectors, <10 for high-growth SaaS
Value unprofitable companies where PE doesn't work.
Calculate →Benchmark: Generally good: <1.5 for value plays, <3.0 acceptable
Find stocks trading below their liquidation value.
Calculate →Benchmark: Generally good: <10 for most sectors, <15 for quality compounders
Compare firms regardless of capital structure or tax rates.
Calculate →Benchmark: Generally good: >5% attractive, >8% very cheap
See what real cash return you get per dollar invested.
Calculate →Benchmark: Generally good: >40% for software, >30% for manufacturing
Measure pricing power and production efficiency.
Calculate →Benchmark: Generally good: >15% for most industries, >25% excellent
See how much profit the core business generates before interest and taxes.
Calculate →Benchmark: Generally good: >10% for most sectors, >20% elite
Understand the bottom-line percentage the company keeps.
Calculate →Benchmark: Generally good: >12% creating value, >20% exceptional moat
Determine if management is creating value above its cost of capital.
Calculate →Benchmark: Generally good: >15% solid, >25% excellent (watch leverage)
Measure how efficiently shareholder money is deployed.
Calculate →Benchmark: Generally good: <1.0 for conservative, <2.0 acceptable
Gauge how leveraged the balance sheet is.
Calculate →Benchmark: Generally good: >3x safe, >6x very comfortable
Check if earnings easily cover debt payments.
Calculate →Benchmark: Generally good: <2x low leverage, <4x moderate, >5x risky
See how many years of earnings it would take to repay debt.
Calculate →Benchmark: Generally good: >1.0 for asset-light, 0.3–0.5 for asset-heavy
Measure how effectively the company uses assets to generate revenue.
Calculate →Benchmark: Generally good: >6x for retail, varies widely by industry
Check how quickly inventory sells — low turnover may signal obsolescence.
Calculate →Benchmark: Generally good: >10% for growth stocks, >5% for mature companies
Smooth out lumpy revenue to see the true underlying growth rate.
Calculate →Benchmark: Generally good: >10% annually for compounders
Track how fast per-share earnings are expanding.
Calculate →Benchmark: Generally good: >10% sustainable, watch for lumpy capex years
Confirm earnings growth is backed by real cash generation.
Calculate →Benchmark: Generally good: >70/100 high quality, <40 warrants scrutiny
Detect earnings manipulation or low-quality accounting.
Calculate →Benchmark: Generally good: >80% healthy, >100% excellent (more cash than earnings)
Verify that reported profits translate into real cash.
Calculate →Benchmark: Generally good: A or B grade indicates disciplined capital stewards
Assess whether management deploys capital in shareholders' best interest.
Calculate →Get a complete equity research report with all 25 ratios calculated and analyzed — free.
Generate a free Basis Report →What are the most important financial ratios for stock analysis?
The most important ratios depend on your investment style, but PE ratio, ROIC, debt-to-equity, and free cash flow yield form a solid baseline for evaluating any stock across valuation, profitability, and financial health.
How many ratios should I check before buying a stock?
Focus on 5–8 ratios that cover valuation, profitability, and financial health. More important than checking many ratios is understanding what each one tells you in the context of the specific industry and business model.
What is the difference between valuation and profitability ratios?
Valuation ratios (PE, P/S, EV/EBITDA) tell you what the market is paying for a business. Profitability ratios (margins, ROIC, ROE) tell you how efficiently the business converts revenue into profits. A cheap valuation with poor profitability is often a value trap.
Where can I calculate these ratios for free?
Basis Report offers free calculators for most ratios on this cheat sheet — including PE, EV/EBITDA, ROIC, DCF, free cash flow, debt-to-equity, and more. Visit basisreport.com/tools for the full list.