There are many important financial ratios. Find important financial ratios free CLICK HERE In business they are essential in making good investments and many of them are included in the links below. Ratios are very handy because they give you a great idea of how a company does in a certain area of business. In stock market investing basics these ratios give you a great idea of how well a company is doing compared to it's competition and if they have a competitive advantage. This is a very important thing because say your stock investing and your analyzing a company that has current ratio of 2 which is assets divided by debts. Now say the industry average is 0.8 this is very good news because it means that the company you are looking at has a + 1.2 greater current ratio than the industry average which is it's competition. For whatever reason this number is higher – maybe the company is more efficient or maybe the company has a way of doing business it's competition cannot compete with; in all cases this is expressed in the numbers and it shows you which company is hard to compete with compared with it's competition. The companies with the best financial data and numbers are not always the biggest companies either. Anyway for the beginner investor THIS IS VERY IMPORTANT MAKE SURE YOU UNDERSTAND RATIOS FOR COMPANIES. Of course make sure that you look at other things besides just ratios to justify a company as being a good investment. There are many other things to consider like the management and how long they have been in business. Ratios only show you the numbers of a company and possibly it's not its intrinsic value in the market. When buying companies always try to consider what their intrinsic value is as a company becasue it's holding onto a business that performs well as a business which makes you money.