Top 5 Most Important Financial Ratios for Stock Investors

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Top 5 Most Important Financial Ratios for Stock Investors

Investing in stocks is a riskier way of earning profit. Large profits can be made if the decision is made correctly. This risk can be minimized by making good estimates about the stocks. For making these estimates financial statements and the earnings are not enough, as financial statements are not easy to interpret and earnings shown can be controlled by various accounting techniques. In this situation, financial ratios can prove to be very handy and optimum profit from stocks is only possible through analyzing them correctly. Financial ratios give in-depth understanding of the financial statements and the true financial position of the company, which in return makes the decision making easier for the investors. Following are the 5 most important financial ratios for the stock investors.

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