Calculate your debt-to-income (DTI) ratio, a critical metric used by lenders to evaluate your ability to manage monthly debt payments. A lower DTI indicates stronger financial health and improves your chances of loan approval.
Sums all monthly debt obligations and divides by gross monthly income, expressed as a percentage. Lenders typically prefer a DTI below 36%.
Measure financial leverage using the debt-to-equity ratio.
Evaluate short-term liquidity with the current ratio.
Measure immediate liquidity using the quick (acid-test) ratio.
Evaluate stock valuation using the Price-to-Earnings ratio.
Measure profitability relative to shareholders' equity with ROE.
Assess asset efficiency with the Return on Assets ratio.
