Key Ratio

What is ‘Key Ratio’

A mathematical ratio that illustrates and summarizes the current financial condition of a company. Key ratios can be used to easily obtain an idea of a company’s financial status. Companies that are in good condition financially will have superior ratios to those that are performing poorly.

Explaining ‘Key Ratio’

There are actually several different key ratios used by analysts to examine a bank’s financial condition. These include the capital to assets ratio, the loan loss reserves to total loans ratio, the liquidity ratio and many others. These ratios provide direct measures of different specific aspects of a bank’s assets, liabilities and cash flow.

Further Reading

  • Data envelopment analysis applied to financial statements – [PDF]
  • An empirical comparison of published replication research in accounting, economics, finance, management, and marketing – [PDF]
  • Does financial development hold the key to economic growth? The case of Sub-Saharan Africa – [PDF]
  • Financial ratio proportionality and inter-temporal stability: An empirical analysis – [PDF]
  • Crowding out or crowding in? The economic consequences of financing government deficits – [PDF]
  • Financial development shocks and contemporaneous feedback effect on key macroeconomic indicators: a post Keynesian time series analysis – [PDF]
  • Financial deepening and economic development of Nigeria: An empirical investigation – [PDF]