what is a key ratio 
key ratio is the name given to any financial ratio that s considered particularly effective at measuring illustrating and summarizing a company s financials in relation to its competitors or peers investors and companies rely on key ratios all the time to get a snapshot of liquidity efficiency profitability and so forth each key ratio focuses on a particular aspect of the company meaning it is often necessary to consult several of them to get a more complete idea of how the subject is faring those that are in sound financial health will have superior ratios to those that are performing poorly 