how can an investor use accounting ratios 
accounting ratios provide a view of a company s financial health but they re only one viable tool when you re assessing investments they can measure a company s liquidity and profitability but this information should be taken in light of other factors to get a complete picture of its sustainability and potential earnings the bottom lineaccounting ratios can provide an accurate assessment of the profitability of a company over the last quarter or fiscal year they include the debt to equity ratio the quick ratio the dividend payout ratio the gross margin and the operating margin these are just a few examples of the many accounting tools that corporations and analysts use to evaluate a company however many other tools highlight different aspects of a company so you ll want to explore and potentially use them as well 