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Financial Ratios Cheat Sheet
25 key ratios every stock investor should know — with instant calculators
Showing 22 of 22 ratios
Formula
Price-to-Earnings (PE)
Benchmark: Generally good: 10–20 for mature companies, higher for growth
Tech: 25–35x • Consumer: 18–25x • Utilities: 15–20x • Finance: 10–15x
Compare what you're paying relative to current earnings.
Try the PE Calculator →Formula
PEG Ratio
Benchmark: Generally good: <1.0 undervalued, 1.0 fair, >2.0 expensive
Adjust PE for growth — cheaper metric for high-growth stocks.
Try the PEG Calculator →Formula
Price-to-Sales (P/S)
Benchmark: Generally good: <2.0 for most sectors, <10 for high-growth SaaS
SaaS: 6–12x • Consumer: 1–3x • Industrials: 0.5–1.5x • Healthcare: 2–5x
Value unprofitable companies where PE doesn't work.
Try the P/S Calculator →Formula
Price-to-Book (P/B)
Benchmark: Generally good: <1.5 for value plays, <3.0 acceptable
Finance: 1–2x • Tech: 3–8x • Utilities: 1.5–2.5x • Industrials: 2–4x
Find stocks trading below their liquidation value.
Try the P/B Calculator →Formula
EV/EBITDA
Benchmark: Generally good: <10 for most sectors, <15 for quality compounders
Tech: 15–25x • Industrials: 8–12x • Healthcare: 12–18x • Utilities: 10–14x
Compare firms regardless of capital structure or tax rates.
Try the EV/EBITDA Calculator →Formula
Free Cash Flow Yield
Benchmark: Generally good: >5% attractive, >8% very cheap
S&P 500 avg: 3–5% • Utilities: 5–7% • Tech (growth): 1–3% • Energy: 6–10%
See what real cash return you get per dollar invested.
Try the FCF Calculator →Formula
Gross Margin
Benchmark: Generally good: >40% for software, >30% for manufacturing
Software: 70–85% • Retail: 25–40% • Manufacturing: 20–35% • Healthcare: 40–60%
Measure pricing power and production efficiency.
Try the Margin Calculator →Formula
Operating Margin
Benchmark: Generally good: >15% for most industries, >25% excellent
Software: 20–35% • Industrials: 8–15% • Retail: 3–8% • Healthcare: 10–20%
See how much profit the core business generates before interest and taxes.
Try the Margin Calculator →Formula
Net Margin
Benchmark: Generally good: >10% for most sectors, >20% elite
Software: 15–30% • Retail: 2–5% • Industrials: 5–12% • Healthcare: 8–15%
Understand the bottom-line percentage the company keeps.
Try the Margin Calculator →Formula
Return on Invested Capital (ROIC)
Benchmark: Generally good: >12% creating value, >20% exceptional moat
Consumer staples: 15–25% • Tech: 20–40% • Industrials: 8–15% • Utilities: 6–10%
Determine if management is creating value above its cost of capital.
Try the ROIC Calculator →Formula
Return on Equity (ROE)
Benchmark: Generally good: >15% solid, >25% excellent (watch leverage)
Tech: 20–40% • Finance: 10–15% • Industrials: 12–18% • Utilities: 8–12%
Measure how efficiently shareholder money is deployed.
Formula
Interest Coverage
Benchmark: Generally good: >3x safe, >6x very comfortable
Check if earnings easily cover debt payments.
Try the Interest Coverage Calculator →Formula
Debt-to-Equity (D/E)
Benchmark: Generally good: <1.0 for conservative, <2.0 acceptable
Tech: 0.3–0.7x • Utilities: 1.5–2.5x • Finance: 3–10x • Consumer: 0.5–1.5x
Gauge how leveraged the balance sheet is.
Try the D/E Calculator →Formula
Net Debt / EBITDA
Benchmark: Generally good: <2x low leverage, <4x moderate, >5x risky
See how many years of earnings it would take to repay debt.
Formula
Asset Turnover
Benchmark: Generally good: >1.0 for asset-light, 0.3–0.5 for asset-heavy
Retail: 1.5–3x • Tech: 0.5–1x • Utilities: 0.2–0.4x • Industrials: 0.7–1.2x
Measure how effectively the company uses assets to generate revenue.
Formula
Inventory Turnover
Benchmark: Generally good: >6x for retail, varies widely by industry
Check how quickly inventory sells — low turnover may signal obsolescence.
Formula
Revenue CAGR
Benchmark: Generally good: >10% for growth stocks, >5% for mature companies
Smooth out lumpy revenue to see the true underlying growth rate.
Try the CAGR Calculator →Formula
EPS Growth
Benchmark: Generally good: >10% annually for compounders
Track how fast per-share earnings are expanding.
Formula
Free Cash Flow Growth
Benchmark: Generally good: >10% sustainable, watch for lumpy capex years
Confirm earnings growth is backed by real cash generation.
Formula
Earnings Quality Score
Benchmark: Generally good: >70/100 high quality, <40 warrants scrutiny
Detect earnings manipulation or low-quality accounting.
Try the EQ Score Tool →Formula
FCF Conversion
Benchmark: Generally good: >80% healthy, >100% excellent (more cash than earnings)
Verify that reported profits translate into real cash.
Try the FCF Calculator →Formula
Capital Allocation Grade
Benchmark: Generally good: A or B grade indicates disciplined capital stewards
Assess whether management deploys capital in shareholders' best interest.
Try the Capital Allocation Tool →Common Questions
Frequently Asked Questions
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.
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