In Growth Invest Young Bulletin Boards Beginners section Investing is just one aspect of personal finance. People often seem to have the itch to try their hand at investing before they get the rest of their act together. This is a big mistake. Personal finance issues include making a budget, sticking to a budget, saving money towards major purchases or retirement, managing debt appropriately, insuring your property, etc. Although the past is not necessarily indicative of future results, it is advisable to examine a company's historical performance.
Financial ratios provide ways to quantify a company's operating success and financial well-being.
Valuation ratios gauge how fairly a stock is priced. The ratios for a given company don't mean much by themselves, but they are very revealing when compared with the company's historical ratios and with the ratios of comparable companies in the same industry. These financial ratios indicate how profitably a company is investing funds from stock offerings, borrowings, and retained earnings. Long-Term Debt to Total Capital . Obtained from the balance sheet, this ratio is used to gauge a company's financial strength.