A balance-to-limit ratio is the amount of money you owe on your credit cards compared to your credit limit. Learn how lenders use a balance-to-limit ratio.

The acid-test ratio measures a company's ability to cover short-term liabilities with its most liquid assets. A ratio above 1 suggests good liquidity; below 1 indicates potential payment struggles ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 ...

Insurance Accounting Terms and Combined Ratio. Insurance companies must save a certain percentage of the premiums they receive to pay for claims. The amount set aside, ...

Solvency ratios are measures of how well a business can pay its debt, and how much debt it has accrued compared to its assets. Learn why this matters inside.

Ratio spreads can be used with either call or put options. Ratio spreads are most likely to return a profit in the following situations: When the options being used are falling in implied volatility; ...

Investors often look at earnings to determine whether a stock or a fund will increase in value. Since stocks are riskier than cash and bonds, investors expect higher returns from equities. The ...

An industry’s concentration ratio is the size of a certain number of firms in an industry compared to its total size. It is used to calculate one or more firms’ dominance of their sector. CR is ...